Toward the end of the interview, Lops drew a parallel that captured the thesis better than any of our own pitch decks have:

"Abbiamo un italiano che ha tokenizzato il dollaro, Paolo Ardoino, e qui abbiamo un altro italiano che sta tokenizzando i terreni in America."

"We have one Italian who tokenized the dollar — Paolo Ardoino — and here we have another Italian who is tokenizing land in America."

He returned to it in the closing thanks:

"Federico Pomi che sta, per quanto riguarda i terreni, replicando lo schema Ardoino sul dollaro."

"Federico Pomi, who for land is replicating the Ardoino model on the dollar."

That is the comparison, on the record, from Italy's most authoritative financial outlet. We did not propose it. The host did.

Key Moments

Five quotes that carry the thirty-six-minute interview, in the order they were spoken. Italian original first, English translation underneath each one.

On the absurdity of medieval paperwork in a digital society — recounting what buying a home in San Francisco actually felt like for someone arriving from Italian tech, expecting Silicon Valley speed:

"Atti di passaggi di proprietà, atti notarili inventati nel medioevo, letteralmente, e continuiamo a utilizzarli all'interno di una società che per il resto si è evoluta a standard digitali."

"Title transfers, notarial deeds invented in the Middle Ages — literally — and we still use them inside a society that has otherwise moved to digital standards."

On the lending niche traditional banks have abandoned — a typical parcel on the Fabrica platform trades for $80,000 to $100,000, precisely the value range where the cost of underwriting destroys a bank's margin:

"Quando si parla di asset di valore inferiore, come un terreno che può valere 80.000 dollari, per la banca quello non diventa più conveniente. Di conseguenza c'è questa immensa nicchia di terreni che oggi non hanno connettività con il sistema finanziario tradizionale, e grazie alla blockchain improvvisamente si apre questa liquidità."

"When you're talking about lower-value assets, like a parcel of land that might be worth $80,000, it stops being economic for the bank. The result is this enormous niche of land that has no connection to the traditional financial system — and thanks to blockchain, that liquidity suddenly opens up."

On tokens as digital primitives — the JPEG analogy, on why a standard format unlocks compounding new applications:

"Una volta che è un'immagine, indipendentemente dal contenuto della fotografia, come una JPEG la puoi utilizzare all'interno di diversi software, mandare da una persona all'altra via email, o stamparla. In modo analogo, con i token, andiamo a creare un contenitore di valore che può essere utilizzato all'interno di numerosi software indipendentemente dal contenuto stesso."

"Once it is an image, regardless of the content of the photograph, you can use a JPEG inside many different software programs, send it person-to-person by email, or print it. In an analogous way, with tokens we create a container of value that can be used inside many different software programs regardless of the content itself."

On tokenization being the present, not just the future — the closing answer of the interview:

"La tokenizzazione è il futuro ed è anche il presente. La stiamo usando quotidianamente. La usiamo con le stablecoin: sono il dollaro tokenizzato. Io la vedo quotidianamente con i terreni tokenizzati."

"Tokenization is the future, and it is already the present. We use it every day. We use it with stablecoins — they are the tokenized dollar. I see it every day with tokenized land."

Lops's own closing line — the host re-states the parallel in his thanks:

"Grazie Federico Pomi che sta, per quanto riguarda i terreni, replicando lo schema Ardoino sul dollaro."

"Federico Pomi, who for land is replicating the Ardoino model on the dollar."

Why It Matters

Tether — built by Paolo Ardoino and his team — took the U.S. dollar and gave it a new rail. USDT did not change what the dollar is; it changed how the dollar moves: globally, instantly, programmatically, without intermediaries. The dollar already had the value. The new rail unlocked the rest.

Real estate is the largest asset class in the world, somewhere around $300 trillion. Land is a real share of that. The asset already has value. What it lacks is a rail. Today, transferring U.S. land still looks the way it looked decades ago: notaries, escrow, county recorders, paper deeds, rubber stamps, weeks of processing, several percent in fees. Banks won't touch the long tail because the underwriting math doesn't pencil at $80K parcels.

Fabrica gives land that rail. Property goes into a purpose-built legal trust. A token on Ethereum controls the trust. Transfer the token, and ownership transfers — in minutes, online, with stablecoins or a bank transfer, with the legal certainty the existing U.S. real-estate system requires. Once the asset is a standard, the rest follows: collateralized lending, peer-to-peer transfer, programmable financial stacks. Tether for the dollar. Fabrica for land. Same shape, one layer further into the real economy.

The full English translation of the interview is below. The original Italian episode is on Il Sole 24 Ore's podcast site and on Spotify.

Full Interview — English Translation

Cripto — Il Sole 24 Ore. Host: Vito Lops. Guests: Simone Lazzaro (co-founder, REVO Insurance) and Federico Pomi (founder, Fabrica). Aired November 26, 2025.

Opening

Vito Lops: Welcome back to Cripto. Vito Lops here with you every week to bring you the latest from this fascinating but controversial world. Many of you have written in over the past few days about Bitcoin's price action — it is being affected by traditional equity-market volatility and by what is generally a bit of a financial drought. Liquidity is somewhat tight right now, so highly liquid, sensitive assets are feeling it.

But today we don't want to talk about price action. We want to talk about what we care about most: the technology underneath the crypto world, and concrete examples of how companies are using blockchain. To do that we have two guests — one in the studio, Simone Lazzaro, one of the founders of the insurance-tech REVO. Welcome, Simone.

Simone Lazzaro: Thanks Vito, thanks for the invitation.

Vito Lops: And we are also joined from San Francisco — and we thank him because over there, when we are recording, it is the middle of the night, so a double thank-you to Federico Pomi, founder of Fabrica, a startup he will now tell us about and how it connects to blockchain. Welcome Federico.

Federico Pomi: Thank you, good morning.

REVO and Parametric Insurance

Vito Lops: Blockchain — we know it is the technology that holds up the whole crypto world we have been telling the story of since late 2022 on this podcast. The Bitcoin purists call it "timechain," they pick a different name for this underlying technology, this distributed ledger, to put it simply. But what is fascinating is that there are companies — like the ones we will hear from today — that are already using it for very concrete cases.

Simone, first of all: how did you discover this technology, how did you become passionate about it, and how did you decide to put it into your company — which I'll remind everyone is listed on the Italian stock exchange?

Simone Lazzaro: I came to this world at the end of 2016, beginning of 2017. On one hand I was drawn to what I was reading about Bitcoin and Satoshi Nakamoto — the more crypto side. On the other I understood that there was this technology, blockchain, which was being translated into Italian with this strange and frankly ugly term: "distributed ledgers." So I started looking for use cases, angles to apply this technology in insurance. I have been in insurance for over twenty years, so the goal was to find a case to apply blockchain to.

In 2020 the idea for REVO was born. We founded the company between 2020 and 2021 and decided that one of REVO's strategic pillars would be parametric insurance. Parametric insurance is friendlier to the customer because it moves from the concept of "damage" to the concept of "event" — cause and effect.

For example: if you buy a REVO policy that covers you against a flight delay or cancellation, we use a smart contract to write that insurance contract on a blockchain. We then query airport databases, and if your flight is delayed or cancelled, you are paid automatically into your bank account or onto your credit card. No bureaucracy. So you can see how immediate it was for us to think of parametric insurance and to think of it on the blockchain.

Vito Lops: So insurance — which in the popular imagination feels a bit like the old economy, given the nature and history of the business — meets a cutting-edge technology that not everyone has even approached yet. An entrepreneurial oxymoron, you could call it.

Simone Lazzaro: Yes, a nice entrepreneurial oxymoron — to speed up processes and make them safer.

How Fabrica Started

Vito Lops: Federico, what about you? Tell us your story from San Francisco — why are you there?

Federico Pomi: My story is a bit different. I come from a tech background. I started writing code when I was a kid, so I have always been drawn to anything new in technology. I applied that in different ways. I am Milanese, I grew up in Italy, and I had entrepreneurial activity in Italy in the 2000s. I founded a project called Milano Tonight, which became tonight.eu — a portal for nightlife, events, restaurants. I ran it for about a decade and then I went to work at Vodafone, where I ran innovation for Vodafone Italy and the relationships with startups. It was through Vodafone that I came to California — Vodafone had a corporate venture arm here in Silicon Valley, and I came over to run their investments. I lived this experience for a few months, fell in love with the place, and decided to stay. I moved here about ten years ago.

In San Francisco I was exposed very early to all things crypto, Bitcoin, then Ethereum, and all the blockchain applications.

Vito Lops: So even in terms of mindset, since there was more openness here than in Europe?

Federico Pomi: Without a doubt — this is the place where new technologies get invented, tested, sometimes thrown away, sometimes adopted. It's the best place to have that exposure early, whether it's self-driving cars or some new token, some new experimentation of any kind. This is the city where you see it before anywhere else.

Vito Lops: And when did the lightbulb go off — the idea to start your company? Tell us what it does.

Federico Pomi: My company is called Fabrica, and what we do is tokenize real estate — we put property titles on the blockchain. How did I get there? It's actually a very personal story.

When I moved here, I decided to buy a home in San Francisco. With the optimism, even the naïveté, of someone from tech, I expected a magical, super-modern Silicon Valley experience. What I actually found was extremely traditional, bureaucratic — a mountain of paperwork, notaries, lawyers, fingerprints, rubber stamps, the county system. The exact opposite of what we imagine from Italy when we think of the United States and the speed of the private sector. I would even say the American system is more bureaucratic and complex than the Italian one — which, as an Italian, surprised me considerably.

With curiosity, I started asking myself: how is this possible? Why all these intermediaries for what looked like a relatively simple operation? I started studying how the U.S. real-estate model and real-estate technology actually work, and I saw clear gaps. At the same time I was beginning to play with the first blockchain smart contracts, and I immediately saw it: these kinds of operations are obviously going to run on digital systems someday. It is absurd that we still use title transfers and notarial deeds invented in the Middle Ages — literally — inside a society that has otherwise moved to digital standards. So we founded Fabrica.

What we do is help people transfer real property fully digitally.

Vito Lops: So you tokenize land — not buildings, but land.

Federico Pomi: Correct. What we do is tokenize land. More precisely, we tokenize the title to the land. Today our focus is land — though legally it is very similar for buildings. A landowner comes to us and says: I want to digitize the ownership of this land. We issue a token that represents the land, and from that point on the person can operate the property by operating directly on the token. When they sell the token, the buyer instantly becomes the legal owner. Or, even better, when they want to use the land to obtain a loan, they can use the token directly as collateral. The loan is issued online, on-chain, in seconds, with a clean and fast interface, without all the costs of intermediaries and the traditional system that they would otherwise have had to go through.

Vito Lops: So this is a concrete example of what we often discuss on Cripto as a possible mega-trend of the coming years: real-world asset tokenization. A very down-to-earth example — literally, in this case, since we're talking about land.

REVO's Two Blockchain Use Cases

Vito Lops: Simone, do you want to go deeper into what you do — since the Cripto audience is fairly expert, you can get into the detail.

Simone Lazzaro: Gladly. On the blockchain we essentially do two things. We manage surety bonds on blockchain — we were the first in Italy to put surety bonds on a blockchain. We do this because in 2023, in the new procurement code, ANAC (the National Anti-Corruption Authority) identified a problem: surety bonds are often counterfeited, there is a lot of fraud. The legislator's response was to require digital signatures on these bonds and to make it possible to register them on distributed ledgers — i.e., on blockchain. We take the bond and put it on our two blockchains, one public and one private — specifically Hyperledger Fabric and Polygon — and we provide gas to the network through our wallet, which holds MATIC. The legislator added a further benefit: policies recorded this way can be discounted 10% to the buyer.

The other thing — and it is our core business — is putting parametric contracts on blockchain. This year we crossed 100,000 parametric policies sold. There are 100,000 Italians who have an insurance contract sitting on a blockchain — most of them probably don't know it. Of those, 40,000 are tied to a very Italian solution: through our agreement with the spiagge.it app, we insure the rain risk on a beach umbrella or sunbed rental. You pick your umbrella in the app, you buy the coverage, we write the smart contract and put it on the blockchain. We use the GPS coordinates of the beach club to query our weather oracle. If it rains, the smart-contract condition triggers, the system emails the customer asking for an IBAN, and an instant payment is fired off — all within minutes. Privacy is handled via hashing on a private chain (Hyperledger Fabric), with selective use of Ethereum.

Tokenized Land — How It Works for the Buyer

Vito Lops: From parametric insurance to beach umbrellas to land — blockchain is spreading into the real economy. Federico, on land, can you go deeper? What about size, how the business works, can someone in Italy buy a token and easily invest in a parcel in California?

Federico Pomi: Absolutely. First, a word on land itself, because I think it is interesting. People think of real estate as the largest asset class in the world — around $300 trillion. Land specifically is talked about less. When we say "real estate," people think of houses. But in places like the United States, land is a huge share of that real-estate value: tens of millions of parcels. There is a market for land — people buy and sell every single day — and the value varies enormously, even more than for houses, because a parcel can be a small lot in the middle of nowhere or a high-value parcel near a metropolitan area. Values range from a few hundred dollars to hundreds of millions. The average parcel transacted on our platform is in the $80,000 to $100,000 range, but we see all of it.

The main quality of being tokenized is that the result is a standard. When someone buys the token that represents the parcel, it does not matter where the parcel is physically — it could be in California, in a small county somewhere, or in the future possibly outside the United States. Anyone can buy it. There is an online marketplace, people can go and purchase directly using stablecoins or by paying from their bank, and within minutes they become the legal owner of that parcel.

Vito Lops: And you mentioned the token can also be used to unlock additional liquidity — the other big theme of real-world-asset tokenization, which on a previous episode we discussed could even reframe how we think about M2 as a measure of liquidity, since assets that today are hard to use as collateral suddenly can be. How does using the token as collateral for new loans actually work?

Federico Pomi: Correct. The token, being a standard, can be used as collateral inside other smart contracts that issue credit lines or, effectively, the equivalent of a mortgage. When the token is used this way, the token representing the land is held in escrow by a smart contract, the loan is disbursed — there are liquidity providers, lenders, who supply the capital — and software automatically coordinates all the movements. No paperwork, no traditional contracts; everything is governed by smart contracts.

This is very powerful especially for assets that historically have struggled to get liquidity through traditional models. Why? Because the cost of executing the operation is suddenly extremely efficient and low. With about two dollars you can stand up a loan, whereas the traditional system requires an entire infrastructure of people and physical work to set it up — which kills the bank's margin on lower-value assets.

If you look at a house in America, going to the bank and getting a loan is straightforward, because the value of the home itself lets the bank earn an attractive margin. When you talk about lower-value assets — a parcel of land worth $80,000 — that no longer pencils for the bank. The result is this enormous niche of land that today has no connection to the traditional financial system. Thanks to blockchain, that liquidity suddenly opens up, and all these possibilities become accessible in an incredibly modern way.

Why Companies Adopt Blockchain

Vito Lops: So blockchain is a bridge to extraordinary efficiency in business costs. Is that what pushed REVO to adopt it, Simone? Efficiency, savings, speed?

Simone Lazzaro: There are two reasons. One is efficiency — speed, savings, and using the technology for what it was actually invented to do. The second is security, using blockchain as a tool to prevent fraud, which in insurance is unfortunately still very widespread. These are the two reasons that pushed us to analyze blockchain — and that have also led us to look at investments in blockchain companies. We watch the space closely, because we believe it will produce real developments for insurance.

Vito Lops: And looking ahead?

Simone Lazzaro: Let's start with regulation. The European insurance regulator, EIOPA, in March of this year published its technical advice to the European Commission. It expressed a very clear concept: one-to-one. That means that any insurance company operating in Europe that decides to invest, directly or indirectly, in crypto assets or stablecoins must set aside safety capital equal to the value of the investment — collateralizing it one-to-one. A very prudent position, designed to protect the end customer.

In terms of where the sector is going, I see three lines. First: increasing use of blockchain for the reasons we mentioned — speed, efficiency, security — in parametric and beyond. Second — and this connects to the first — stablecoins, particularly the more compliance-solid ones like USDC and Tether. We see them as potentially the last mile of payment in insurance: fast, efficient, and crucially they cross borders. All insurance companies — Italian, European, global — are themselves reinsured, and reinsurers are everywhere: London, the U.S., Japan, Bermuda. Settling those relationships often takes weeks or months. If we can combine blockchain (efficiency, speed) with stablecoins (payments), the process becomes much more efficient than today.

Third, we shouldn't forget the digital risks. Three categories: custody of wallets (a service banks are starting to offer, which itself can and for banks must be insured); exploits and code malfunctions (the U.S. startup Chainproof, backed by Sompo of Japan and Munich Re, is one example of insurance against this); and operational risk — errors, fraud, theft — where Europe is increasingly demanding insurance solutions, and we at REVO are looking at it.

But to be clear about what we cannot solve with parametric or non-parametric insurance: we cannot cover the volatility of digital assets — those are market risks, and they cannot be insured. And we cannot insure the more modern solutions like cross-chain bridges, where it would be extraordinarily complicated to prove where the error occurred.

The Tether Comparison

Vito Lops: Very interesting — that insurance can use blockchain both to make itself more efficient and as a business model for new insurance products. We're glad to be telling these case histories on Cripto today.

Simone mentioned Tether, and that prompts a thought, Federico. We have one Italian who tokenized the dollar — Paolo Ardoino — and here we have another Italian who is tokenizing land in America. With all the respect of the case, what do you think of the comparison?

Federico Pomi: Clearly very pleased with the comparison, given Tether's success. If we look at tokenization more broadly, the way I see it — it is essentially a roadmap of things that are happening over time. Blockchains were born with natively digital assets, the cryptocurrencies, and then little by little they expanded into the real world. In that expansion, different asset classes are brought on board one at a time. We started with assets that — without taking anything away from any project — are technically simpler to tokenize: things like the dollar, and now stocks (we are seeing many U.S. stocks coming onto the blockchain). And we are progressively moving toward more complex asset classes like real estate, where the regulation and the differences between one asset and another are harder to handle technically.

What's fascinating is watching this shift of asset classes from traditional systems — paper or centralized digital — toward a digitalized world that is decentralized and interoperable. You end up with these tokens that are genuinely standards. I like to use the comparison with the JPEG: once an image is a JPEG, regardless of its content, you can use it inside countless software programs, send it from one person to another by email, print it. Everything is standardized thanks to the JPEG. With tokens it's analogous — you create a container of value that can be used inside many different software programs, regardless of the content itself. And that creates an enormous amount of opportunity to build new applications and new businesses. That, to me, is the real reach of tokenization for digitizing assets globally.

On Use Cases vs. Speculation

Vito Lops: One of the most interesting things that emerges from interviewing the two of you is that blockchain has so far also been used to create a lot of valueless tokens. We know that's part of why Cripto exists — for financial education — because 99.99% of tokens in circulation today struggle to find a use case or any value beyond speculation. But if tokens become the representation of something that already has value in the world — a real asset — the conversation, and the image of the underlying technology, changes radically. What do you think, Simone?

Simone Lazzaro: Vito, you're exactly right. Trying to give use cases to the technology is the challenge for the digital world. It's what led us to think of the technology not as an end in itself, but as a means to gain efficiency and security. When we look at Italian or European fintech startups, one of the first things we look for is the use case — that's where you actually understand whether there is concrete, intentional use of the technology and a possible go-to-market that makes sense, or whether it's an idea, however brilliant, that's an end in itself and unlikely to find a market.

Vito Lops: And on interoperability, Federico — that's one of the killer applications of this sector's future, the fact that the token can communicate with multiple platforms?

Federico Pomi: Without a doubt one of the most powerful things about tokenization. Initially you see the first-order benefits — speed, immediacy, efficiency. Then, gradually, the ability to put these applications together like Lego blocks. The token becomes a digital primitive, and that opens up new combinations: different business models stitched together in completely new ways that weren't possible before. That opens the door to entrepreneurial imagination — new ideas unlocked by the blockchain.

Public vs. Private Chains

Vito Lops: Almost wrapping up — Simone, what about public vs. private blockchains, and how you choose?

Simone Lazzaro: We obviously respect the control processes — we are listed, we are in a regulated sector, our data is published quarterly. On partner selection, we have a preference for Italian partners where possible, including for blockchain implementation. We have an internal team that handles all the design work, and a co-managed internal/external setup for development. On the type of chain, our current approach was set about three years ago — but this technology runs fast, very fast, so we are already thinking about how to evolve our approach for the near future. In short: design and idea internal; for execution we look for the companies we trust the most. If they are Italian, even better. But on blockchain build-out specifically, we cannot always stay inside the country — we have to look outside. We will see if that changes in the coming years.

Vito Lops: Federico, you are if I'm not mistaken on Ethereum as the preferred platform.

Federico Pomi: Correct. Until today we have been on Ethereum. The system could in principle run on any modern blockchain, but Ethereum is the gold standard, in a sense, for applications — so that's where we are.

Closing — The Future, and the Present

Vito Lops: Last question, the same for both of you — is tokenization really the future, and where will it take us?

Simone Lazzaro: I personally think yes — absolutely the future. It will take us toward a more efficient future where even an old-fashioned sector like insurance gains in friendliness toward customers and, thanks to concrete use cases, becomes more usable for everyday citizens as the technology spreads.

Vito Lops: Federico, the last word to you. Is tokenization the future?

Federico Pomi: Tokenization is the future, and it is already the present. We use it every day. We use it with stablecoins — they are the tokenized dollar. I see it every day with tokenized land. And gradually it will become daily use: assets will simply move around as tokens instead of as paper documents. A conversion of the entire old world to this new infrastructure — happening unevenly, on different timelines, but possibly accelerating in 2026, which many are calling one of the most important years for giving real impulse to this process.

Vito Lops: Which we at Cripto, of course, will keep telling you about every week. All that's left is to thank our guests. Thank you, Simone Lazzaro of REVO, for telling us how the insurance world can use, and is already using, blockchain technology.

Simone Lazzaro: Thank you Vito, thanks for the invitation.

Vito Lops: And thank you, Federico Pomi, who for land is replicating the Ardoino model on the dollar. Thanks for being here on Cripto.

Federico Pomi: Thank you very much, it was a pleasure.

Original episode: "Ecco come le aziende stanno usando la blockchain", Cripto, Il Sole 24 Ore, 26 November 2025. Host: Vito Lops. Guests: Simone Lazzaro (REVO Insurance) and Federico Pomi (Fabrica). Translation by Fabrica from the original Italian audio.

But a legal structure is not static. Property law evolves. Lending standards change. New wallet technologies and protocols emerge. The trust agreement that governs your property needs to keep pace.

With Trust Agreement v4, it does. And updating is as simple as clicking a button.

Go to your property page on Fabrica, click Upgrade, and the new trust agreement is attached to your token. No paperwork, no county filing, no closing costs. The legal protections and your property's functionality improves overnight while nothing changes about how you use your property day to day.

Properties tokenized going forward use v4 by default.

Think of it like a firmware update. Except what is updating is not software. It is the legal container that holds your property rights.

Here is what v4 adds:

Lost Keys? There Is Now a Way Out

The most common question we hear: "What if I lose my private key?"

In traditional real estate, losing a deed does not mean losing the property. The county keeps the records. But with tokenized property, the trust previously required you to burn the token before transferring the property out. No key, no burn, no exit.

v4 introduces a two-tier recovery system.

Tier 1: Self-Service Recovery

For lost keys, stuck tokens, or estate situations where no one disputes ownership.

1. Record a sworn affidavit at the county declaring you have lost access to your wallet

2. Deliver a copy by certified mail to the property address and to any recorded lienholders

3. Wait 90 days for anyone to contest

4. If no one contests and the wallet stays inactive, receive a deed transferring the property out of the trust

The entire process runs through public records. No platform approval needed. No admin key. If Fabrica disappeared tomorrow, this mechanism would still work.

The affidavit must be executed under oath and notarized in whatever form the local jurisdiction requires. This ensures it works with any county recorder in the country. If a recorder still refuses to accept it, the agreement provides a clear fallback: go to court under Tier 2.

If anyone contests the Notice during the 90 days (by recording a lis pendens, affidavit of adverse claim, or any equivalent instrument), the process halts immediately and moves to court. This protects against abuse while keeping the uncontested path fast.

Tier 2: Court Order

For theft, disputes, or contested claims. A court resolves the matter and issues an order authorizing the property transfer. This is the same process courts use for disputed property every day.

Estate Planning Made Simple

What happens when a property owner dies?

If heirs inherit wallet access (through a seed phrase in a safe or with an estate attorney), they simply become the new owner. No special process needed.

If heirs do not have wallet access, they follow the Tier 1 recovery process with probate documents. The executor or heir files the sworn affidavit, attaches letters testamentary, waits 90 days, and receives the deed. The proof of succession must be valid under the laws of the state where the property is located. If it is not, the agreement directs them to the court path.

No more worrying about property getting stuck because someone did not pass on their keys.

Modern Wallet Support

The trust agreement now explicitly supports:

• Multisig wallets (like Safe)

• Account abstraction wallets (like smart contract wallets with social recovery)

• Custody solutions controlled by the owner

These are called "Smart Wallets" in the agreement. They work exactly like regular wallets for ownership purposes, with additional protections and improved clarity on ultimate ownership.

Lending Just Got Safer

If you are using your token as collateral for a loan, or if you are a lender considering land-backed tokens, v4 has important protections.

Structural Protection for Lenders

When a token is in a lending contract, the new recovery process cannot be used to pull the property out from under the lender. The borrower must first return the token (typically by paying off the loan) before they can initiate recovery.

This is not a policy that someone checks. It is structural: if the token is in a lending contract, the process simply does not start.

Additionally, when someone initiates recovery, they must deliver the recorded affidavit not just to the property address but also to every recorded lienholder in the county's official records. Mortgage holders, deed of trust beneficiaries, and other encumbrance holders get direct notice of any recovery attempt.

UCC Article 12 Integration

The trust agreement now explicitly recognizes Property Tokens as "controllable electronic records" under the Uniform Commercial Code. This means:

• Clear rules for secured lending: lenders know exactly how to perfect a security interest

• Qualifying purchaser protection: good-faith buyers and lenders are protected

• Standard commercial practices: the same legal framework that governs other digital assets

Token transfers still transfer beneficial ownership of the property through the trust, exactly as before. But when it comes time to dissolve the trust and take a traditional deed, that deed must satisfy the recording and conveyancing requirements of the state where the property sits. The agreement now makes this explicit, so there is no ambiguity about where UCC Article 12 ends and real-property law begins.

Protection Against Stolen Tokens

If someone steals your keys and uses the token as collateral, what happens?

• The lender is protected if they acted in good faith without notice of the theft

• Your remedy is against the thief, not the innocent lender

• The moment you file a Notice at the county, any future lender loses their good-faith defense

This creates the right incentives: owners are motivated to secure their keys and report theft quickly, while lenders can extend credit with confidence.

Built to Last

Several structural provisions ensure the trust holds up under legal scrutiny and works across jurisdictions:

The trust cannot collapse. In most Fabrica trusts, the owner serves as both trustee and beneficiary. The agreement now structurally prevents the legal doctrine of "merger" (where a trust fails because one person holds both roles) by recognizing that equitable interests are held by a broader class of stakeholders, including future token holders and legal successors.

Works in every state. The agreement is governed by California law but expressly preserves local rules for the things that matter most: recording, conveyancing, lien priority, and probate are all governed by the laws of the state where the property is located. Quiet title actions and foreclosures can be brought in local courts.

No tax surprises. The structural provisions that keep the trust alive do not alter the tax treatment. The current owner remains the sole taxpayer.

What Stays the Same

The core design principles have not changed:

• Token = Title. Owning the token means owning the property

• No gatekeepers. The trust works without Fabrica or any other company

• Onchain truth. The blockchain is the authoritative record

• Self-custody. You control your keys and your property

v4 makes the system more robust without adding complexity for normal operations. If you never lose your keys and never need to recover your token, nothing changes about how you use it.

For Property Owners: The Key Points

For Lenders: The Key Points

Technical Details

The full trust agreement and changelog are available:

• Trust Agreement Open Source Repository: GitHub

• IPFS Trust Agreement v4.2: bafkreihkphcet3ncjlmd7kv4wgc32ot3mnkpudavtydnwt4hdaa3q5z6mi

• Changelog: GitHub

For a deep dive into the recovery mechanism design, see What Happens When You Lose Your Keys?

Questions? Reach out at help@fabrica.land or visit docs.fabrica.land.

If you are a Fabrica property owner and have lost control of your token, whether through lost keys, a compromised wallet, or the death of a keyholder, contact us at help@fabrica.land or on the chat on the website.

We will walk you through the recovery process and assist you at every step.

The rest of this article explains the design behind the recovery system: how it works, why we built it this way, and what protections are in place. If you are here because you need help now, start with the email above. The details can wait.

The Problem

Fabrica links real property to a digital token through a legal trust. Whoever holds the token is the legal owner of the property. Transfer the token, transfer the ownership. Burn the token, dissolve the trust and take a traditional deed. It is elegant, fast, and cheap.

But it introduces a question that does not exist in traditional real estate: what happens if the owner loses access to their token?

In conventional property ownership, losing a deed does not mean losing the property. The county recorder maintains the record, and a new deed can be issued. But in Fabrica's system, the trust agreement requires the token to be burned before any property can leave the trust. If the owner cannot burn the token (because they lost their private key, the token got stuck in a malfunctioning smart contract, or the owner died without passing on wallet access), the property is locked in place with no exit path.

This is not a hypothetical risk. As more properties are tokenized, the probability of at least one owner losing access to their keys approaches certainty. A system that has no answer for this scenario cannot be taken seriously by title insurance underwriters, institutional lenders, or any property owner thinking long term.

This article explains how we designed a failsafe to solve this problem: what we considered, what we chose, what we left out, and why.

The Design Constraints

Before exploring solutions, it helps to understand why this is harder than it looks.

The double-spend problem. If we make it easy to recover property without the token, we create a way for bad actors to exploit the system. A property owner could sell the token to a buyer, then go to the county recorder and claim they "lost" their keys, effectively getting the property back while the buyer holds a worthless token. Or worse: a borrower could pledge the token as collateral, take out a loan, then use the recovery mechanism to pull the property out from under the lender.

The collateral protection problem. Lending protocols accept Fabrica tokens as collateral. When a token is in a lending contract, the lender has a legal security interest in the underlying property. Any recovery mechanism must not allow the borrower to dissolve the trust and take the property while the lender is holding the token.

The independence problem. Fabrica's trust is designed to work even if Fabrica as a company ceases to exist. The trust agreement is open source, the smart contracts are permissionless, and property ownership does not depend on any centralized service. Any recovery mechanism must preserve this independence. We cannot introduce a "master key" or an admin function that gives any single entity the power to override property rights.

The legal recognition problem. Whatever mechanism we build must produce documents that a title insurance underwriter can follow and feel comfortable insuring. Title examiners review recorded documents at the county level. The recovery path needs to produce a coherent chain of title that a human reviewer (who may have never heard of blockchain) can understand.

These constraints eliminate most obvious solutions. You cannot just add an admin burn function to the smart contract (that violates independence). You cannot let the owner sign an offline recovery document (if they lost their keys, they cannot sign anything). You cannot rely solely on courts (too slow for uncontested cases and too expensive for low-value properties).

Validators, Confidence Scores, and Void Tokens

Before diving into the recovery mechanism, three concepts need explanation. They come up throughout this article and are central to how the system works in practice.

Validators are independent service providers that evaluate Fabrica tokens and publish a confidence score for each one. They monitor onchain activity (token transfers, contract interactions) and offchain records (county filings, title history, operating agreements) to produce a composite assessment of a token's health. Validators expose these scores both offchain (through APIs that lending protocols and marketplaces can query) and, in some cases, onchain (through oracle contracts that other smart contracts can read directly). Anyone can operate a validator. The trust agreement does not depend on any specific validator existing, but validators provide the real-time signal layer that connects legal events to the onchain ecosystem.

The confidence score is a multi-digit number that represents a validator's assessment of a token's status. Each digit captures a different dimension: title history, operating agreement quality, onchain activity, and (most significantly) the token's recovery status. Lending protocols, marketplaces, and other participants use the confidence score to make decisions. A protocol might require a minimum score before accepting a token as collateral. A marketplace might flag tokens with low scores. The score is not a legal determination. It is a risk signal, similar to a credit score for property tokens.

Void tokens. Onchain, a token is a token. The smart contract does not have a concept of "void." A void token is a token whose confidence score has been permanently degraded to a level that signals the property has been legally detached from the token through a recorded Deed of Distribution. The token still exists in the wallet, but every validator that examines the county records will see the deed and flag the token accordingly. Any protocol or marketplace checking the score will treat it as worthless. The legal dissociation happens at the county recorder; the confidence score is the mechanism that communicates it to the onchain world.

The Loss Scenarios

Not all key losses are the same. The appropriate response depends on the circumstances:

The key insight is that the level of risk determines the level of process. When no one can move the token, the risk of fraud is low, and a streamlined self-service process is appropriate. When someone has stolen the keys and can move the token at any time, only a court can sort out the competing claims.

The Solution: Two-Tier Recovery

We settled on a two-tier system: a self-service path for uncontested cases, and a court-order path for everything else.

Tier 1: Uncontested Recovery

For lost keys, stuck contracts, and estate situations where no one disputes who the rightful owner is.

The process is modeled on a quiet title action, a well-established legal procedure where a property owner files a public notice, waits for anyone to come forward with a competing claim, and if no one does, the court confirms ownership. Title insurance underwriters handle these regularly.

Here is the process:

1. Confirm the token is in an eligible location. The trust agreement (Section 10.2) requires that the Property Token is held by an Account (EOA) or a Section 7.3(a) Contract Account (essentially, a wallet or custody solution controlled by the Beneficiary). If the token is in a Section 7.3(b) functional contract (lending, escrow, collateral), the owner must first get it back, for example by paying off a loan, before initiating recovery. This is a structural gate that protects lenders and other counterparties without requiring any verification step.

2. Record a Notice of Lost Token Control at the county recorder where the property is located. This is a sworn affidavit (or equivalent sworn recordable instrument), executed under oath and notarized in whatever form the situs jurisdiction requires (acknowledgment, jurat, or equivalent). The Notice identifies the property, the token, and the circumstances of loss, and includes an attestation that the token is held by an Account or a 7.3(a) Contract Account. For estate cases, it also includes a death certificate and letters testamentary. Within ten days of recording, the claimant must deliver a copy of the recorded Notice by certified mail to: (a) the property address as shown in county tax records, and (b) each person who appears in the county recorder's official records as the holder of a recorded lien, deed of trust, mortgage, or other encumbrance against the property. Filing a false Notice constitutes perjury, a criminal act with a paper trail recorded at the county. If the county recorder refuses to accept the Notice for recording, the Beneficiary must proceed to the court-ordered path under Tier 2.

3. The 90-day quiet period begins on the date of recording. The recorded Notice constitutes constructive notice to the world of the Beneficiary's claim. Any interested party (lenders, purchasers, other claimants) may contest the Notice during this period by recording with the same county recorder any instrument permitted by applicable law that gives constructive notice of the contest, including but not limited to a lis pendens, a notice of pending action, an affidavit of adverse claim, or any equivalent instrument recognized by the recording statutes of the jurisdiction. A Notice of Lost Token Control recorded by a different claimant for the same token also constitutes a contest. To be effective, a contest must appear in the county records before the Quiet Period expires; filing a lawsuit alone, without a corresponding recorded instrument, does not halt the process. If a contest is recorded during the Quiet Period, the process immediately halts and the matter is resolved under Tier 2 (court order).

4. During the 90 days, the system watches for wallet activity:

   • If the wallet signs any transaction (not just a token transfer, but any onchain activity originated by the account), the process stops. A wallet that is transacting is not a wallet whose keys have been lost. Either the owner recovered access (good news) or someone else controls the wallet (escalate to Tier 2).

   • If nothing happens, continue to step 5.

5. After 90 days without wallet activity or contest, the Beneficiary delivers a sworn certificate to the Trustee confirming that: no transaction was initiated by the Account, no contest was recorded with the county recorder, and the Beneficiary complied with the notice-delivery requirements (including delivery to the property address and to each recorded lienholder, or that no lienholders were identified in the county's official records). The Trustee, at the Beneficiary's direction, then executes and delivers a Deed of Distribution transferring the property out of the trust. The deed recites the trust agreement's alternative dissolution provisions, the recording information of the Notice, and the Beneficiary's sworn certificate.

6. The deed is recorded at the county. The token becomes a Void Token: it still exists onchain, but it has been legally dissociated from the property. Anyone holding the void token has no property rights.

Tier 2: Contested Recovery (Court Order)

For theft, disputes, or any situation where Tier 1 cannot complete (for example, the token moved during the quiet period).

1. The owner petitions a court of competent jurisdiction for an order declaring the token lost, stolen, or inaccessible, and authorizing dissolution of the trust.

2. Standard judicial process applies: service of process, hearing, judgment. The court order substitutes for both the token burn and the cryptographic signature.

3. A Deed of Distribution is recorded with a certified copy of the court order attached. The token becomes a Void Token.

This is the path of last resort. It is slower and more expensive, but it handles the cases where someone is actively contesting ownership, exactly the kind of dispute that courts are designed to resolve.

Stolen Tokens: The Immediate Deterrent

Before initiating either tier, a theft victim can take one immediate action: submit a police report to the confidence score provider. The token gets flagged as "stolen" in the confidence score. This does not recover the property, but it functions as a digital stop-payment:

• Lending protocols that check the confidence score will reject the token as collateral

• Marketplaces can flag or hide the token

• Any buyer or lender who proceeds despite the flag cannot later claim ignorance

This is similar to how OpenSea handles stolen NFTs: a flagged asset becomes commercially useless even though it still exists onchain. The goal is to make theft unprofitable.

Estate Planning

One of the most practical use cases for this mechanism is estate succession.

If heirs inherit wallet access (through a seed phrase stored in a safe, with an estate attorney, or in a dead man's letter), they simply become the new owner. The trust agreement (Section 10.3.4) explicitly confirms that successors who inherit key access can exercise Owner Rights directly, including dissolving the Trust under Section 10.1. No special process needed.

If heirs do not have wallet access, they follow Tier 1. Instead of the owner filing the affidavit, the executor or heir does, attaching letters testamentary or equivalent proof of legal succession recorded alongside the Notice (Section 10.3.2). The proof of succession must be valid and sufficient under the laws of the jurisdiction where the property is located. If the legal successor cannot obtain sufficient proof in that jurisdiction, the dissolution must proceed through the court path under Section 10.4. Upon expiration of the Quiet Period, the legal successor steps into the Beneficiary's position for purposes of directing the Trustee to execute the Deed of Distribution (Section 10.3.3).

If heirs dispute among themselves, that is Tier 2. A probate court determines the rightful successor.

This approach works naturally because the recovery mechanism does not care why the keys were lost, only whether anyone can move the token. From the system's perspective, death-without-key-access and lost-key are the same problem.

What We Considered and Rejected

The final design emerged from evaluating multiple approaches. Here is what else we looked at and why we did not pursue it.

Pre-Signed Recovery Authorization (Rejected)

The idea: When a property is first tokenized, the owner signs a recovery authorization that gets stored offchain. If they later lose their keys, they can present this document to recover the property.

Why we rejected it: The recovery authorization is signed by the same private key that controls the token. If the key is stolen, the thief has both the token and the recovery authorization. If the key is lost, the owner cannot produce the authorization because they cannot sign anything. The only scenario where it helps is when the owner loses their key but kept the signed document separately, a narrow benefit for the added complexity. We decided the marginal gain did not justify the process overhead of collecting and storing these documents for every token.

Trust Protector Role (Rejected)

The idea: Add a "protector" to the trust, a designated party (possibly Fabrica or a third party) with the authority to intervene in specific situations, such as authorizing a recovery when keys are lost.

Why we rejected it: A trust protector introduces exactly the kind of centralization we are trying to avoid. The entire value proposition of Fabrica's trust is that it works independently: the trust agreement is open source, the smart contracts are permissionless, and ownership does not depend on any company remaining in business. A protector would create a single point of failure and a liability magnet. If the protector goes out of business, acts improperly, or is compromised, the trust breaks. Every function a protector would serve is already covered by the two-tier recovery mechanism: Tier 1 for uncontested cases, Tier 2 (courts) for contested ones.

Smart Contract Recovery Function (Rejected)

The idea: Add a governance-controlled function to the smart contract that can burn or freeze tokens in specific circumstances, such as a multi-signature approval from designated parties.

Why we rejected it: This is the centralization problem in its most direct form. Anyone who can freeze or burn tokens without the holder's consent has the power to override property rights. This is fundamentally incompatible with the trust's design, which ensures that only the token holder can burn the token.

Disabling Token Burns for Flagged Tokens (Rejected)

The idea: Prevent a thief from burning a stolen token and off-ramping the property through the standard dissolution path, by disabling the burn function when the confidence score indicates the token is stolen.

Why we rejected it: First, the standard off-ramp already requires identity verification and validator cooperation. A thief cannot silently burn a token and record a deed without the validator processing the off-ramp. Second, the real fraud vector for stolen tokens is not off-ramping (which requires interacting with the real-world legal system) but using the token as collateral in a lending protocol (which is entirely onchain). Disabling burns does not prevent collateral fraud. Third, disabling burns requires a smart contract change, which we scoped out. Fourth, a burn freeze could harm legitimate owners who are falsely flagged or who resolve a dispute.

Arbitration (Deferred)

The idea: Add an arbitration clause as a middle ground between the self-service Tier 1 and the full court process of Tier 2.

Why we deferred it: Arbitration works well for disputes between parties who have both agreed to it. In a theft scenario, the thief never consented to the trust agreement or its arbitration provisions, and arbitrators cannot bind non-consenting parties the way courts can through due process. We may add arbitration later as an optional intermediate step for disputes between known parties (for example, between co-owners who have both accepted the trust agreement), but it is not essential for the initial design.

Dead Man's Switch / Heartbeat (Considered, Not Included)

The idea: Require token holders to periodically confirm they still have access (for example, sign a message every year). If they miss a heartbeat, trigger a recovery process automatically.

Why we did not include it: Interesting concept, but operationally impractical for most property owners. Requiring regular interactions with a blockchain wallet creates a maintenance burden that is foreign to how people think about property ownership. Missing a heartbeat should not put your property at risk. This may be worth revisiting later as an opt-in feature for sophisticated holders, but it should not be a default requirement.

How We Protect Lenders

Lender protection is structural, not procedural. It does not depend on any service provider checking anything.

The eligibility gate. The trust agreement (Section 10.2) requires that the Property Token be held by an Account (EOA) or a Section 7.3(a) Contract Account before Tier 1 can begin. Section 7.3(a) covers custody wallets (multi-sig wallets or similar solutions where the holder is the Beneficiary). Section 7.3(b) covers functional contracts (lending, escrow, collateral management, bridges) where custody does not confer beneficial ownership. If the token is in a lending contract, it is in a 7.3(b) Contract Account. The borrower simply cannot initiate Tier 1. They must first cause the token to be returned, typically by paying off the loan, before they can file a Notice. This works with any lending protocol because the eligibility gate is based on the onchain location of the token, not on any offchain verification.

Scenario: Borrower files a fraudulent notice. The Notice of Lost Token Control is a sworn affidavit that includes an attestation that the token is held by an Account or 7.3(a) Contract Account. Filing this when the token is verifiably in a lending contract is perjury with a paper trail at the county recorder. Even if a borrower lies, the 90-day Quiet Period gives the lender time to detect the situation. The lender or lending protocol can initiate any transaction from the wallet holding the token (triggering automatic process halt under Section 10.2.3) or record a contest (lis pendens, affidavit of adverse claim, or any equivalent instrument) with the county recorder, which immediately halts the process and routes to court.

Scenario: Stolen token used as collateral. A thief steals keys and immediately borrows against the token. The trust agreement (Section 11.4) explicitly protects the lender in this case: a party who obtains a security interest for value, in good faith, and without notice of the theft is a "protected secured party" whose position is not subordinated to the original owner's claim. The original owner's remedy is against the thief, not against the lender. This reflects a deliberate design choice: wallet security is the owner's responsibility (Section 7.5), and a lender who acted in good faith should not bear the cost of the owner's compromised keys.

The trust agreement's UCC Article 12 provisions add specificity here. Section 11.4 provides "qualifying purchaser" protection for good-faith transferees and "protected secured party" protection for good-faith lenders who obtain control of the token for value, without notice of competing claims. The Notice of Lost Token Control, recorded at the county, constitutes constructive notice that defeats both protections for anyone who acquires the token or extends credit after the notice is filed.

This means the owner's strongest move after discovering a theft is to file a Notice of Lost Token Control immediately. The moment the Notice is recorded, it triggers a confidence score downgrade from validators, which lending protocols can see in real time. Any lender who extends credit after the Notice is recorded cannot claim good-faith status under UCC Article 12. The faster the owner acts, the smaller the window in which a thief can exploit the token as collateral.

Identity Verification: An Honest Assessment

There is a question at the heart of Tier 1 that deserves a direct answer: when someone files a Notice claiming to be the owner of a wallet, how does anyone know they are telling the truth?

The trust agreement deliberately does not insert a gatekeeper into this process. No validator, platform, or service provider must verify the claim before the 90-day clock starts. This is by design: the legal mechanism must work even if the company that created it ceases to exist. Instead, it relies on a combination of deterrents, structural gates, and the passage of time.

The sworn affidavit. The Notice of Lost Token Control is a sworn affidavit, executed under oath and notarized in whatever form the situs jurisdiction requires. It includes an attestation that the token is held by an Account or a Section 7.3(a) Contract Account. Filing a false Notice is perjury, a criminal act with a permanent paper trail in the county records. This raises the stakes significantly for would-be fraudsters.

The eligibility gate. If the token is in a lending contract, escrow, or other functional contract (Section 7.3(b)), the process cannot begin at all. A fraudster cannot target a token that is actively being used as collateral.

The 90-day constructive notice. The recorded Notice constitutes constructive notice to the world. Anyone doing a title search will see it. Any interested party can contest. This mirrors how quiet title actions work: the public record is the notification mechanism, not a private service provider.

The passive owner problem. Consider this scenario: a legitimate owner holds a token in their wallet and simply does not interact with it for months. Someone files a fraudulent Notice against their wallet. The 90-day quiet period passes. The property gets pulled out of the trust. The real owner comes back six months later and discovers they have been robbed through the very mechanism designed to help people like them.

This is a real vulnerability. We mitigate it through several layers, but we do not fully eliminate it:

1. Perjury deterrent. The sworn Notice with a permanent county record creates criminal liability for false filings.

2. Physical delivery to the property address and lienholders. Within ten days of recording, the claimant must deliver a copy of the recorded Notice by certified mail to the property address as shown in county tax records and to each recorded lienholder identified in the county recorder's official records. This ensures that any occupant, passive owner, or existing creditor who does not monitor county filings still receives actual notice. Compliance with these delivery requirements must be attested in the sworn certificate.

3. The 90-day window. Three months is a long time. Most property owners interact with their assets (checking values, paying taxes, responding to offers) within that window. We chose 90 days specifically to balance speed for legitimate claimants against protection for passive holders.

4. Constructive notice via public record. The county recording is visible to anyone performing a title search, including title companies, lenders, and real estate professionals who interact with the property.

5. Platform-level notification (offchain service, not a legal requirement). As a practical matter, the confidence score provider monitors county records and can update the score and attempt to notify the current holder through available channels (email, platform notifications, onchain transaction to the wallet). This is a service-layer protection, not a trust agreement requirement. The legal mechanism works without it.

6. Trustee reliance safe harbor. The trust agreement (Section 8.2) allows the Trustee to rely on recorded documents without independent blockchain investigation, absent actual knowledge of fraud. In most Fabrica trusts, the Trustee and Beneficiary are the same person, which means the Trustee has direct knowledge of whether the claim is legitimate.

What we cannot solve: An owner who is completely disengaged (no registered email, no wallet monitoring, no interaction with the property for months) and who is targeted by a determined fraudster willing to commit perjury. This is the edge case where the system is most vulnerable. For such situations, Tier 2 (court order, with formal service of process) provides stronger protections.

We chose to be transparent about this limitation rather than pretend it does not exist. The alternative (requiring a gatekeeper to verify every recovery) would create a dependency on a specific entity and break the walk-away independence of the trust. The perjury deterrent, structural eligibility gate, and 90-day public notice period provide meaningful protection without introducing centralization.

What This Does Not Cover

We are intentional about the boundaries:

It does not prevent theft. The recovery mechanism responds to theft after the fact. It deters exploitation (through the confidence score flagging), provides a legal path to recover the property (through courts), and ensures the stolen token can be rendered worthless (through the void status). But it does not prevent someone from stealing private keys in the first place.

In the stolen-then-collateralized scenario, the owner bears the loss against a good-faith lender. When a thief borrows against a stolen token before the owner files a Notice, the trust agreement protects the lender's position (Section 11.4). The owner's remedy is against the thief, not the lender. This is a deliberate tradeoff: wallet security is the owner's responsibility, and lenders who acted in good faith should not absorb losses caused by compromised keys. The owner can limit this window by filing a Notice of Lost Token Control as quickly as possible, which triggers a confidence score downgrade and eliminates the lender's good-faith defense going forward.

It does not fully protect passive, unregistered owners. As discussed in the identity verification section, an owner who never registered with Fabrica, does not monitor their wallet, and has no contact information on file is the hardest to protect during the 90-day quiet period. The mitigations (sworn notice with perjury liability, structural eligibility gate, constructive notice via public record) reduce but do not eliminate this risk.

Wallet Security: A Separate Layer

One attack we considered carefully: what if someone steals an owner's private key and, rather than transferring the token, simply operates from the owner's wallet? The attacker could borrow against the property, extract the loan proceeds, and disappear, all without triggering any token transfer that the confidence score could detect. The owner might not realize their keys were compromised until the loan defaults.

This is a real threat, but it is not one the trust agreement should address. The trust agreement governs the relationship between the property and the token: who the Beneficiary is, how the trust dissolves, what happens when token control is lost. Wallet security (how the owner protects access to their private key) is a different layer entirely.

The analogy to traditional real estate is direct. A property deed does not protect against someone forging the owner's signature on a mortgage application. That protection comes from identity verification at closing, notarization requirements, and the lender's own due diligence. The deed defines the property rights; it does not secure the owner's identity.

The same separation of concerns applies here:

• The trust agreement defines the property-token relationship and provides recovery when token control is lost.

• The wallet layer secures access to the private key through hardware wallets, multisig, two-factor authentication, and social recovery.

• Lending protocols are responsible for their own borrower verification, just as traditional mortgage lenders are responsible for verifying the borrower's identity before disbursing funds.

For users of Fabrica's embedded wallet, we enforce two-factor authentication. This means that even if an attacker obtains the user's credentials, they cannot sign transactions without the second factor. Self-custody users who bring their own wallets are responsible for their own key management. That is the fundamental tradeoff of self-custody, and it applies to all onchain assets, not just tokenized property.

We deliberately chose not to embed wallet security requirements into the trust agreement. Doing so would couple the legal instrument to a specific technology stack, violate the independence principle (the trust must work regardless of what wallet the owner uses), and create a false sense of security. The trust agreement is the wrong layer to solve this problem, just as a deed is the wrong layer to mandate what kind of lock you put on your front door.

The trust agreement does, however, make the consequence of poor wallet security explicit. Section 7.5 states that the Beneficiary is responsible for maintaining the security of access to their Account. If a theft leads to an innocent lender being harmed, the lender's position is protected under Section 11.4, and the owner's remedy is against the thief. This creates the right incentives: owners are motivated to secure their keys, and lenders can extend capital with confidence that good-faith collateral positions are protected.

Why Title Insurance Underwriters Should Be Comfortable

The entire framework is designed to produce documents that fit within existing title examination practices:

• The Notice of Lost Token Control is a sworn affidavit recorded at the county, creating a cloud on title visible in any standard title search. Contests must also be recorded (lis pendens, affidavit of adverse claim, or equivalent instrument), keeping everything in the same public record. This mirrors the quiet title notice patterns that underwriters handle daily.

• The 90-day quiet period is analogous to statutory notice periods in quiet title actions. Title examiners are familiar with waiting periods before title can be confirmed.

• The Deed of Distribution is a standard recordable instrument with clear recitals explaining the alternative dissolution: the trust agreement provision, the recording information of the Notice, and the expiration of the Quiet Period without contest. The chain of title (original on-ramp deed > recorded Notice > passage of time > Deed of Distribution) is entirely documented in public records.

• The court order path (Tier 2) produces the gold standard of title evidence. Court-ordered conveyances are a well-understood product in the title insurance industry.

• No technology dependency. The entire chain of title can be examined by a title professional who has never heard of blockchain. Every document in the chain is a standard recorded instrument at the county recorder.

An underwriter evaluating a property that went through this process would see a coherent, documented chain with no gaps, no unexplained jumps, and no reliance on technology that the examiner needs to understand.

The Walk-Away Test

One of the principles we applied throughout the design: everything must work if Fabrica disappears.

The trust is independent. The smart contracts are permissionless. The trust agreement is on IPFS. But what about the recovery mechanism?

• Tier 1 operates entirely through county recordings and the passage of time. The Beneficiary records a Notice, waits 90 days, and the Trustee executes a Deed of Distribution. No platform, validator, or service provider is a required participant in this legal process. The trust agreement (Section 10.5.2) explicitly states that offchain records like confidence scores are administrative convenience; the legal validity of the dissolution is established by the recorded Deed of Distribution alone.

• Tier 2 goes through the court system, which is entirely independent of Fabrica.

• The confidence score is an offchain service layer. It monitors county records, updates scores, and can attempt to notify token holders, all useful services, but none required by the trust agreement. If the scoring system disappears, the recorded Notice at the county still creates the legally operative cloud on title. Lending protocols would lose the real-time signal, but the legal process still works.

We deliberately avoided inserting any gatekeeper (a trust protector, a validator, an admin function) into the legal mechanism. The recovery works through public records and courts, institutions that predate blockchain and will outlast any company.

Summary

The recovery mechanism provides a clear, self-executing, legally grounded path for the most likely loss scenarios, without introducing any dependency on a specific company or service provider. It does not eliminate every risk (no system can). The edge cases that remain are the same ones that courts handle in traditional real estate.

For technical details, see the Fabrica Trust Agreement (open source) and Fabrica Documentation.

This blog post references directly to Fabrica Trust Agreement v4.2 as available on GitHub and IPFS. Future versions of the Trust Agreement might have different articles, sections and provisions.

This meant terminating the trust, burning the token, and recording a deed. Straightforward in theory. But for the local title company handling the closing, it raised a question they had never encountered: does a property that went through a tokenization trust produce clean title?

The escrow officer escalated to First American Financial's underwriting department. First American is the largest title insurance company in the United States, publicly traded (NYSE: FAF) with over $6 billion in annual revenue. Their underwriters evaluate title risk for a living.

The underwriting team reviewed Fabrica's trust structure, the token mechanics, and the termination process described in the Trust Agreement. They escalated further to First American's corporate headquarters in Santa Ana, California. After a thorough review, underwriting drafted the specific affidavit language the seller would need to sign, referencing the trust termination and token burn. The escrow officer confirmed the property was clear to close.

The transaction closed. The buyer received title insurance from First American. The property changed hands like any other real estate sale.

Why This Matters

This was a simple case. The property was tokenized, held in the trust without any onchain activity, and then off-ramped back to traditional ownership. No transfers, no lending, no complex history.

But that simplicity is precisely what makes the result significant. If a tokenized property that simply entered and exited a trust could not clear title insurance, nothing more complex would ever work. This was the baseline test, and it required First American's corporate underwriting team to reach a determination.

What their review validated was not a specific transaction. It was the trust structure itself: the mechanism by which title enters the trust, is controlled by a token, and exits cleanly when the trust terminates. Their underwriters concluded that this process produces the kind of traceable chain of title that institutional title insurance requires.

For context, title insurance exists to protect buyers from hidden defects in ownership history. When a title company insures a property, they put their balance sheet behind the statement that ownership is clean. First American's willingness to underwrite this transaction, after escalating the review to their corporate headquarters, is a data point that matters for anyone evaluating whether tokenized property can operate within the existing real estate system.

The Baseline for Everything That Follows

Every future scenario builds on this foundation. Onchain transfers, lending, multiple owners, cross-chain operations: all of these produce more complex title histories than a simple in-and-out. But they all rely on the same underlying trust mechanics that First American reviewed and cleared.

The interaction with First American's team was professional and constructive throughout. Their underwriting department asked precise questions, reviewed the trust mechanics carefully, and arrived at a clear determination. This is how institutional adoption works in practice: not through announcements or partnerships, but through real transactions that touch title professionals, underwriters, lenders, county recorders, and tax assessors. Each one evaluates real risk, reaches real conclusions, and becomes an additional proof point.

For landowners like Shirley, a surprise tax bill shouldn’t mean losing their property. She owned two neighboring lots free and clear—but without fast payment, the county was about to seize and auction them off.

When time is short and liquidity is tight, traditional options fail. Banks were too slow. Paperwork piled up. And help felt out of reach.

That’s when Shirley found Fabrica—and unlocked the value of her land in a matter of minutes.

The problem: $10,000 due, no time to wait

Shirley’s situation was urgent. Her two properties had tax issues and title complications that had been building up. She needed to come up with $10,000 fast to avoid a tax sale, but her attempts to get help through traditional channels hit wall after wall.

Banks wouldn’t lend. The process was too slow. The paperwork was overwhelming. And even private lenders wanted extensive documentation and credit checks.

Shirley didn’t need a loan in weeks—she needed liquidity right now.

The onchain solution: instant liquidity from land

That’s when a friend told her about Fabrica—a platform that enables landowners to instantly borrow against their land using blockchain technology.

With Fabrica:

• Shirley onboarded her properties online, with help from the Fabrica team.

• She didn’t need a credit score, bank statements, or wait for approvals.

• The process was fast, transparent, and built for urgency.

Once the land was onchain, Shirley was able to borrow against it in minutes. Fabrica even coordinated directly with the county to make sure her tax payments were processed before the deadline.

This wasn’t just a workaround. It was a better system.

The outcome: land saved, problem solved

Thanks to Fabrica, Shirley paid off her tax debt just in time—and kept full ownership of her land.

No lengthy loan applications. No credit checks. No middlemen.

Now, she knows she can access liquidity instantly if she ever needs it again—just by tapping into the value of the land she already owns.

Why it matters

Shirley’s story is becoming more common. Many landowners hold real estate that’s valuable—but illiquid. Until now, unlocking that value required jumping through hoops, often too slowly to solve urgent problems.

Fabrica changes that.

By putting land onchain and enabling real-time borrowing, Fabrica makes land work like a liquid asset. It’s fast. It’s simple. It’s built for real-world problems like Shirley’s.

📌 Your land is an asset. Use it like one.

🔗 Visit our site and bring your land onchain today

Transcription from Shirley

I am a small business owner and I came across the information for Fabrica was through one of my private crypto groups. And so when I started seeking some funding for my two real estate properties, I had looked at a couple of traditional banks and funding sources and you know, it was pretty much instant no's. But when I reached out to Fabrica, Daniel contacted me pretty quickly and we started working on my properties. And once my properties were actually on the platform and tokenized, then, you know, it was exactly as he explained to me. I was able to instantly access the liquidity for my properties. Easy process within a few minutes.

When I reached out to support, I thought it was just a general support representative. Turns out it was actually Federico that I ended up messaging with. And this was very late at night just going through the whole process of being able to actually tokenize land that I own and access to liquidity.

Even my banker, when I explained to him what I did, he was surprised and very impressed by that. You know, people that are, you know, in my private crypto group, I've explained to them I have my experience with Fabrica and even some of them have reached out to them. It's just been, like I said, probably the best experience that I've had in dealing with anything related to real estate or crypto related or even trying to pursue funding. I've never had a great experience like this. I really do appreciate the time and follow up and all the efforts and it's been a great experience. I really do appreciate it and I'm looking forward to continuing to work with them.

Curious about the process? Try it yourself at fabrica.land/go, or follow this quick overview:

Just enter your property address, parcel number, or GPS coordinates. Within moments, a fresh, ad hoc property page will appear right before your eyes.

Our platform automatically generates a detailed property page, complete with AI-crafted marketing descriptions and stunning images based on your property's actual landscape. Prefer a personal touch? You can easily upload your own photos and adjust descriptions.

Fabrica verifies your ownership type—individual, joint, or entity—and automatically generates all the necessary legal documents tailored to your local jurisdiction. We simplify the complexities for you.

Sign your documents securely online from your computer or phone, with a certified notary guiding you on camera. Your identity is verified, ensuring legal validity and official county recording.

Fabrica establishes a Trust to secure your property and records it with your local county. Once recorded, your property token is minted and delivered directly to you, marking your entry into the digital future of land ownership.

The onboarding process takes only about 10 minutes of active participation. While recording speeds vary by jurisdiction, most properties are fully onchain within days—and in some counties, just hours.

Watch our Founder, Federico Pomi, demonstrate the complete process of adding a real property in the video below:

👉 Add your property today and see how effortless it is to go from deed to onchain land.

In this blog post, we spotlight a conversation on the Technically Legal podcast between host Chad Main and Daniel Rollingher, General Counsel at Fabrica. They discuss Fabrica’s mission to move property onto the blockchain, how that shift changes ownership and lending, and why real estate is primed for an upgrade.

Daniel’s background in real estate runs deep—his grandfather was a developer across the Southwest U.S. and parts of Canada. Growing up, Daniel felt a sense of pride knowing his family was involved in creating commercial projects he could see in person. But as he pursued law school, he became more interested in real estate’s intersection with technology:

“I actually went to law school as a business-minded person and wound up diving into real estate tech. It was clear there were so many areas where technology could solve real pain points—especially around how we buy, manage, and sell property.”

A key moment came when he worked for a startup called RealtyShares, which used crowdfunding to finance development deals. That experience introduced Daniel to the complexities of bridging real estate with modern tools—and planted a seed for what would become Fabrica.

Fabrica’s core mission is deceptively simple: allow people to buy, sell, and borrow against land without the messy overhead of traditional systems. At its heart sits the concept of tokenized property:

1. Create a “container” for each property.
   This container is typically a trust. The property deed is transferred to the trust, so at the county records office, you’ll see the trust’s name as the titleholder—not an individual.

2. Tie ownership to a blockchain token.
   Whoever holds the token controls the trust—and thus, the land. As Daniel puts it:

   “Owning the token means you own the property. It’s that simple.”

3. Automate legal obligations.
   For external obligations like property taxes or county notifications, Fabrica ensures the trust stays compliant. Internally, if you transfer the token onchain, you transfer ownership—no new deed, no notary, no repeated paperwork.

At first glance, it might sound complicated to set up a trust for each property. But as Daniel explains, the trust is a flexible legal tool:

“The trust is basically a signpost. It handles anything that needs a county’s stamp of approval. Everything else—the day-to-day power and control—flows straight to whoever holds the token.”

Crucially, these trusts can be self-run: you can be both trustee and beneficiary, maintaining complete control with fewer headaches.

Title insurance in real estate is old-school for a reason—it’s meant to protect owners from hidden claims or recording errors. But it’s also expensive, time-consuming, and often pays out very little in claims relative to fees. At Fabrica, the focus is on accuracy at the start:

1. Rigorous Data Checks:
   Fabrica runs a “token score,” an internal system that checks title history, property details, and the onchain record. A low score means the property might have issues—like liens or incomplete filings—giving potential buyers or lenders a heads-up.

2. Future “Warranty” on Data:
   While Fabrica doesn’t replicate old-school title insurance, Daniel hints at offering a guarantee if there’s a mistake in Fabrica’s data. That’s something he believes can be done more transparently and more affordably than traditional title coverage.

A property on Fabrica isn’t just for purchase or sale—it can be used as collateral in decentralized finance (DeFi). Rather than dealing with the complexities of a traditional mortgage, you lock your land token in a smart contract and borrow stablecoins or other crypto in seconds. This appeals especially to owners of unimproved land—an asset category banks typically overlook:

“In the U.S., unimproved land is a five trillion-dollar market. Yet it’s extremely underserved by traditional banks. Owners often can’t get a simple loan to pull out liquidity. We’re fixing that.”

1. Instant Loan Offer:
   Using partner lending protocols (like NFTfi or MetaStreet), a borrower lists their land token as collateral.

2. Smart Contract Security:
   The token is held in a smart contract until the loan is repaid. If there’s a default, the lender can claim the token.

3. No Paper Chase:
   Everything from credit checks to collateral appraisals is done through these onchain platforms, drastically cutting down time and cost.

The big innovation is that tokens can be lent against in a global marketplace. In other words, you don’t need a local bank to see your property’s potential; you can find a lender halfway around the world.

One recurring question: “What about the county recorder’s office?” Each state in the U.S. has distinct rules for how property changes hands. Colorado might not require you to file new paperwork, while California does. Fabrica’s solution is to do the heavy lifting:

“Whenever there’s an NFT transfer, we handle the relevant filings so the county sees the record updated. States differ, but from the token holder’s perspective, it’s still the same process: you transfer the NFT onchain, and you own the property.”

Looking ahead, Daniel sees an even bigger shift internationally:

“Once we prove the model in enough states, there’s no reason it can’t expand to other countries. For many jurisdictions, a blockchain-based system offers more security than existing land registries.”

The real estate sector can be stubbornly resistant to innovation—but it’s also enormous. Daniel and Chad note how technology typically disrupts industries that rely on archaic processes. Daniel suggests that by giving landowners an easier route to liquidity and by lowering overhead for buyers, Fabrica could open the door to:

• Faster transactions: Closing times measured in minutes, not weeks.

• Deeper liquidity: More potential buyers and lenders, worldwide.

• Streamlined property management: Automated property taxes, simplified lien tracking, and easy access to capital on DeFi platforms.

AI is also on Daniel’s radar:

“The heart of title insurance is checking records and cleaning them up. That’s exactly what large language models are great at. We’ve already found AI can dramatically improve how quickly we verify a property’s history.”

So where does Fabrica go from here? Daniel highlights a few next steps:

1. Expanding Lending Products
   Instant, global access to capital can make land more dynamic. If someone needs quick liquidity, they can borrow against their property. If they want to store wealth, they can hold it—knowing that selling or refinancing is a few clicks away.

2. Going Global
   The same trust framework can be adapted in other countries. The key is bridging local rules with a unified onchain experience.

3. Tokenization at Scale
   Imagine entire real estate portfolios onchain, where each property token is easily traded, bundled, or used in financial products—like an index of raw land across the southwestern U.S., or farmland in the Midwest.

4. AI for Title Cleanup
   Speeding up the behind-the-scenes checks with AI can drastically reduce the friction of transferring properties and verifying who really owns them.

Fabrica’s approach to real estate merges the old and new—respecting the legal frameworks that keep property ownership stable, while harnessing blockchain and smart contracts to replace slow, error-prone steps with instant, verified transfers. If this seems like a radical shift, it’s useful to remember how quickly the internet changed taxi rides and film rentals. Real estate might be next in line.

Interested in learning more about Fabrica or exploring how to tokenize your property?

• Check out Fabrica.land for our latest tools and property listings.

• Browse some of our blog posts for more on the Fabrica Trust Agreement, our lending integrations, and the broader vision of onchain land.

• Follow us on X and join our Discord community for updates, or reach out to our support team if you have questions about listing your own property.

A revolution in real estate ownership is underway—turning a system of deeds and stamps into a fluid, onchain process. As Daniel notes, “Anytime there’s friction, you can expect technology to step in.”
If frictionless land ownership sounds compelling, Fabrica is here to help pave the way.

Disclaimer: This blog post is provided for informational purposes only, reflecting the discussion between Chad Main and Fabrica’s General Counsel, and is not intended as legal advice. Real estate transactions can be highly regulated; always consult your own counsel or tax professional when making decisions.

Unlocking Illiquid Assets: From Digital Art to Real Estate with Conor Moore of MetaStreet

Listen to this episode from Landline on Spotify. Welcome to Landline by Fabrica! In our inaugural episode, host Federico Pomi engages in an insightful conversation with Conor Moore, co-founder of MetaStreet, exploring the dynamic intersection of digital and real-world assets.

https://spotify.com

1. Bridging Digital and Real-World Assets

   • Traditionally illiquid assets like land, art, and luxury goods are becoming more accessible through tokenization onchain.

   • Both MetaStreet and Fabrica are focused on simplifying the process for users, building better infrastructure and seamless user experiences.

2. DeFi Meets Real Estate

   • MetaStreet started with NFT-backed loans for digital collectibles but always aimed to support real-world assets, including real estate.

   • Fabrica is pioneering the tokenization of land, reducing transaction costs, and simplifying property management through onchain solutions.

3. The Value of Tokenization

   • Tokenization unlocks the borrowing potential of specialized assets: land, collectibles, or luxury goods, that traditional banks often overlook.

   • Instant settlements, flexible terms, and streamlined refinancing options offer a significant leap forward compared to traditional lending systems.

4. Marketplaces and Two-Sided Challenges

   • Building these systems requires educating and engaging both sides of the equation: lenders and asset owners.

   • While real-world assets might feel novel to Web3 lenders, they bring established value and lower risk, particularly in markets like real estate.

5. Regulatory and Cultural Shifts

   • Clear regulatory frameworks and robust user education are key to wider adoption.

   • As projects like MetaStreet and Fabrica demonstrate reliable structures, they pave the way for broader institutional and individual trust.

6. Looking Ahead

   • MetaStreet is broadening its scope, integrating more real-world assets like GPUs, domain names, and solar farms to build secondary markets for onchain debt.

   • Fabrica is refining instant land tokenization, enabling property owners to unlock value through onchain lending with unprecedented ease.

Federico Pomi

Hello everyone and welcome to Landline. That's our first episode of a podcast that we are starting. I'm Federico, your host, and we have Connor from MetaStreet with us. Hi, Connor, how are you?

Conor Moore

Hey, thanks for having me.

Federico Pomi

Of course. It's a pleasure to have you. Before we get into this chat, which will be a very casual interview, I wanted to give you a few words on what we're doing with Landline. The idea is to have a podcast that bridges two different worlds. On one side, we have the onchain world of builders and tech companies who are building beautiful products and usually head down on their keyboards. On the other side, we have people on the ground, like real people buying real land, investing in properties, collecting beautiful properties, finding the latest gems on the ground, and improving them. That's what we do at Fabrica. We bring real land onchain so that people can buy and sell it and borrow against their properties. With that, Connor, tell us a bit about yourself, your company, who you are, what's the story?

Conor Moore

Thanks for having us. MetaStreet is a three-year-old project that we started in 2021. Before MetaStreet, I worked my whole career in traditional real estate finance. So I'm familiar with both the builder side and the user side from Fabrica's perspective.

I was working at a real estate private equity fund in 2021, and I was seeing innovations happening in crypto, specifically in DeFi. I was fascinated by it—Uniswap, Aave, permissionless transactions, permissionless markets. I thought there was a natural progression for some of the work I was doing in traditional finance and private equity to also go onchain. Dealing with title, closing deadlines, wiring money—these processes are archaic, probably the most archaic in real estate compared to any other industry.

At that time, NFTs were booming, and we were getting a lot of excitement around them. Token-based innovations like Uniswap and Aave involved markets and borrowing and lending in a margin style. My background was in capital markets, focusing more on asset financing and asset acquisition rather than liquid token-to-token transactions. NFTs, specifically ERC-721s, were just starting to be developed onchain to house those types of assets.

In 2021, the space was mainly about art and collectibles. We thought maybe we were early, but ultimately we believed that all unique assets would be represented on chains for permissionless, instant settlement, and leveraging DeFi. Art and collectibles are also financialized markets in traditional finance, so we started there with a long-term goal of disrupting the mortgage-backed securities industry, banking, and asset financing in general.

We've been building MetaStreet for the last three years, creating a cool lending structure with tranches that resemble a permissionless mortgage-backed security product. We've raised two rounds, have 20 employees now, and lots of integrations, supporting asset tokenization like what you're doing at Fabrica Land. We're also seeing people tokenize GPUs, precious metals, watches, and more. Coming from 2021, when it was mainly crypto punks and PFPs, we're coming full circle from traditional finance and real estate investing to building a DeFi protocol that was financing JPEGs and now competing with traditional capital markets. The next four years are exciting, especially with changes in administration and more friendly policies.

Federico Pomi

Beautiful. Thank you. That's a perfect overview of what you guys do and your history and background. Let me start with some basics. Let's say I'm a user. Who are your users? What do they do? What do they look for? And what do you provide them? What's the problem you're solving?

Conor Moore

We're a two-sided marketplace. We built permissionless infrastructure that allows anyone to create a lending pool. That pool pairs a token being lent with a collateral type allowed as collateral. For example, we have the Fabrica land pool with Fabrica land NFTs as collateral and USDC as the token pair. Once the pool is created, anyone can deposit money into it and define parameters, forming an order book that meets their criteria for their money.

If you're familiar with tranching, you take a bunch of assets with different risk profiles and cut the overall pool into different pieces with unique risk profiles. Users can lend money against land at various loan-to-value (LTV) ratios, stacking participants to give borrowers the best execution possible. Lenders seek yield by depositing into pools that match their risk-return profiles. Borrowers own valuable, illiquid assets and can borrow against them easily onchain without traditional processes.

Compared to Aave, where collateral is liquid token pairs like BTC or ETH, our collateral consists of hard assets like land. Borrowers can borrow against their land with one click, and the pool manages the rest. Lenders earn higher yields, typically mid-teens, because they take on more risk with illiquid assets. We use tranches to manage risk, offering higher yields for higher risk.

Federico Pomi

Thank you. Let me try to recap. You have a platform that allows people with digital and real assets to borrow against them. If they own a JPEG or other digital assets, they can use them as collateral to get real money represented as tokens, like US dollars. On the other side, investors put their capital into a pool, fine-tuning their risk profile by choosing which tranches to invest in. The platform manages the pool and provides capital to borrowers at the best possible rates, handling the complexity of organizing investors. From a borrower standpoint, it's easy to bring in an asset and get cash under certain conditions. From the lender perspective, it's easy to deposit capital into a pool with a chosen risk profile and earn profits.

Conor Moore

Exactly. When we started, there was only one NFT-based lending protocol with $10 million in cumulative volume. It was very early, and concepts like account abstraction, gas sponsoring, on/off ramping were not common. People weren't doing much with real-world assets (RWAs). It was mainly ETH-based lending against JPEGs and PFP NFTs with a small participant universe. Now, with on-ramps like Coinbase smart wallet, collateral types include familiar assets like land and watches, expanding the lender profile. For example, someone can lend money against watches with just a few clicks using Apple Pay, without setting up wallets or dealing with gas fees. This makes it easier to attract mainstream users.

Federico Pomi

I totally hear you there. For context, most people don't know, but Fabrica has been around for six years, targeting landowners who buy and sell plots of land. There's no way to approach them with crypto solutions like MetaMask; it would scare them off. So we built a more user-friendly system with custodial solutions, allowing users to log in with email and buy properties using dollars from their bank accounts. It was extremely challenging, but now the infrastructure has improved massively over the past two years. Companies like ours have user-friendly products that handle wallet complexity, gas fees, and more, making it easier for people to interact with onchain solutions.

Conor Moore

Yes, and new people can come in, but you've created brand value and a reputation that's hard to recreate as a new player. We're dealing with extremely valuable assets and large amounts of money, so trust and regulatory compliance are crucial. We're proud of our work in this area and hope for better rails, understanding, and players in the crypto space.

Federico Pomi

Absolutely. Now, earlier you mentioned different asset classes, starting with NFTs and moving toward real-world assets. What are the real-world assets you're referring to? And do you think it makes sense to combine these two parts of the story as a roadmap, showing how we started with digital assets and are now expanding to widely recognized assets with less friction?

Conor Moore

Yes. When we raised our first round, the pitch was that art and collectibles are financeable assets in traditional capital markets. People get art loans against artwork regularly, so we could build a product for this user base and iterate. Our big-picture vision is to recreate Wall Street onchain, handling bond issuances, securitizations, and removing middlemen for efficient asset pricing and debt creation.

We want to focus on cash-flowing assets that generate revenue to pay down debt, unlike luxury goods or assets valued only for their next trade. For example, land today, real estate tomorrow. We aim to finance assets that generate cash flows and are closer to being digital. Deep in networks and hardware are closer to digital and easier to tokenize and borrow onchain. Eventually, all assets will be tokenized and traded onchain, but initially, we'll focus on assets that are hard to finance off-chain, like land and watches.

Federico Pomi

That's interesting. You mentioned adverse selection, which is risky in our space. Additionally, there's no reason why someone can't take their assets to a bank for a loan. Why doesn't that happen?

Conor Moore

We call the watch pool a digital pawn shop because traditional pawn shops are localized and often have a bad reputation. They have to value assets like watches but might not have buyers, making the process time-consuming and physical. Onchain, you send your watch to a vault, receive an NFT, and can borrow against it in seconds. The market sets yields, LTVs, and durations based on multiple data sources, eliminating the risk of being ripped off. Capital is global, so anyone can lend without knowing the borrower. There's no need for trust, and everything is managed by smart contracts.

If we were to compete with traditional mortgage companies, we might not yet be better, but for undeveloped plots of land, watches, and domain names, our alternatives are much better. There's often no alternative or the alternative is inefficient, making our solution highly valuable.

Federico Pomi

I'll double down on that. In some cases, you don't have an alternative, which is a positive signal. For example, getting a loan against valuable land takes time and is expensive with traditional banks. It's impossible to borrow against 90% of properties due to high transaction costs and overhead. With what we do, we make it possible and much better than traditional mortgages. Even the best Web2 mortgage websites offer a terrible experience compared to our onchain solutions.

Conor Moore

Yes, even integrating directly into your front end allows one-click borrowing, which is very convenient. Refinancing onchain is also incredibly fast compared to traditional mortgages, which require paperwork and time. We're delivering the user experiences that people will use tomorrow for their houses today.

Federico Pomi

Absolutely. Now, what do you think it will take to reach a point where we can borrow and take a mortgage onchain, affecting how our houses are managed?

Conor Moore

Technically, we're not far away. We need to add some features, but it's more about the Overton window shifting. People need to see onchain settlement as an extension of the financial system they're familiar with. Building good products and pitching them is essential, but overall sentiment in the U.S. is becoming more crypto-friendly. Initiatives like Coinbase's advocacy and support from influential figures are shifting mainstream perspectives. This will make it easier for people to adopt onchain financial solutions without associating crypto with negative aspects.

Federico Pomi

That's a good start. How do we acquire real users and shift from being a small private party to something beneficial for more people?

Conor Moore

Fintech succeeded by reskinning the front end for banks, making processes simpler. Crypto can do the same but also improve the backend. Our offerings are superior to traditional and fintech solutions, but the missing pieces have been on/off ramps and connections to traditional financial rails. With infrastructure now in place, we can target mainstream users through various marketing efforts like SEO, postcards, and other accessible methods. For example, sending out postcards with QR codes to attract users unfamiliar with crypto.

Federico Pomi

I agree. To build products for end consumers, we need to start implementing and experimenting, even if it seems early. We're sending out postcards targeting people far from the crypto world, providing simple instructions to access our services. This helps rewire our thinking and attract mainstream users.

Conor Moore

Yes, traditional crypto marketing is insular, targeting people already interested in crypto. To reach mainstream America, we need broader marketing strategies like SEO. Postcards with QR codes can attract people who aren't familiar with crypto but are interested in passive income or new financial products. This approach is more relatable and accessible.

Federico Pomi

Absolutely. On ramping and off ramping remains a significant challenge. Despite building credible solutions, bringing in and sending out capital is a pain point. We've considered accepting the reality of outdated banking infrastructure and focusing on bringing value onchain in different ways. At Fabrica, we offer a way to bring real estate onchain quickly, competing with traditional methods by reducing complexity and time.

Conor Moore

The on-ramp process will continue to improve. Despite challenges like account closures from banks, the overall trend is toward better infrastructure. Reducing friction and increasing incentives to on-ramp are crucial. MetaStreet provides incentives like higher yields for lenders and benefits for borrowers to tokenize their assets, making the process worthwhile despite the initial complexity.

Federico Pomi

Well said. What’s next for MetaStreet, and how can we help you get there?

Conor Moore

Our progression started with a lending DAO, then an automated vault lending strategy, and now the current product with order book-style tranches. Moving forward, we want to focus on the collateral side—finding or tokenizing worthy collateral like GPUs, nodes, and deep in networks that generate onchain value. We also aim to develop a liquid secondary market for debt positions, allowing users to trade their ERC-20 representations of pool shares easily.

Federico Pomi

Understood. How do you decide which asset classes to target, especially when some are already well-served?

Conor Moore

We aim to support all asset classes initially and double down on what works based on market response. The industry is still immature, so we support a wide range of assets and let the market decide. We focus on educating lenders and borrowers about the safety and benefits of our products, emphasizing regulatory compliance and legal soundness. Building trust through education is key to attracting a diverse lender base.

Federico Pomi

You've been a great partner for this first episode of Landline. Is there anything else you'd like to share with our audience?

Conor Moore

We're very excited about what you've built and the integration we've achieved. Our focus is on onboarding lenders and borrowers. If your audience is curious, we’re open to phone calls, DMs on Telegram, emails—whatever it takes to help people learn about this space and our product. Our main message is to reach out and ask questions so we can help people get comfortable and excited about our offerings.

Federico Pomi

Beautiful. Connor, thank you so much. We're looking forward to the future. Thank you to all the listeners for joining us today. Bye, have a good one. Take care.

Conor Moore

All right, see you.

The partnership will expand Fabrica’s lending capabilities and continue to bridge the gap between real estate, the largest asset class in the world, and onchain markets. In the partnership, MetaStreet is able to offer pool-to-peer lending, where lenders can contribute liquidity into a shared pool, regardless of individual contribution sizes. This pool will efficiently and automatically allocate capital to borrowers on Fabrica based on the estimated value of the property, with loan terms tailored to each borrower.

Real estate is the US’s largest asset class at $60 trillion. Bringing undeveloped land ($5T) to the blockchain through Fabrica supercharges an asset class that typically faces significant information asymmetry and slow operations. Digital-asset-based lending further widens this access by unlocking capital for millions of landowners without having to go through a bank. This allows landowners to access capital within minutes, eliminating weeks of outdated paperwork.

For more information on Fabrica’s lending, check out Guide to Lending on Fabrica Properties.

According to Federico Pomi, CEO of Fabrica:

Our partnership with MetaStreet shows that combining onchain building blocks brings tangible benefits to users, creating products that traditional finance simply can’t offer.

Fabrica is the leading platform to bring real estate properties onchain at scale. The established platform lets users buy and sell real land via digital assets, removing the complexity and inefficiency of the legacy deed system. Since 2018, it has refined its model and worked closely with local and state regulators enabling it to operate in all 50 states, hold over 20 licenses and onboard over 500 properties onto the platform. Fabrica allows users to buy, sell, and get loans on real properties fully onchain. Fabrica is backed by leading investors, including Mark Cuban, OpenSea, Sound Ventures (Ashton Kutcher's fund), Pioneer Fund, and Urban Innovation Fund.

MetaStreet is a liquidity scaling protocol focused on unlocking liquidity for digital assets. It offers innovative financial products that allow users to leverage their NFTs without the need to sell them. MetaStreet is backed by Dragonfly Capital, Nascent, OpenSea & others.

Introduction

Navigating the complexities of real estate lending can be challenging. But imagine lending securely against tangible real estate assets—solid collateral that not only protects your investment but also offers attractive returns. With Fabrica, you can enjoy attractive returns backed by real land, coupled with the transparency and efficiency of blockchain technology.

This guide will show you how Fabrica bridges traditional real estate with cutting-edge blockchain solutions, offering you secure and innovative lending opportunities.

In this guide (specifically written for lenders), we’ll explain how Fabrica’s system works, address common questions and concerns, and outline the rights and obligations of both lenders and borrowers. Whether you’re new to blockchain technology or an experienced lender seeking to diversify your portfolio, this resource will help you understand the mechanics, benefits, and security measures of lending against onchain real estate assets.

Fabrica is a platform that digitizes ownership of real estate—currently focused on plots of land in the United States—by representing them as property tokens onchain. Ownership of a Fabrica token grants full rights to the underlying property it represents.

In other words, by acquiring the token, you become the legal owner of the real property.

This innovative approach combines the speed, transparency, and efficiency of blockchain technology with the security and legal recognition of traditional real estate ownership.

Each property token is linked to a trust—a legal instrument similar to an entity for the purposes of this article. Ownership of the property is recorded at the local jurisdiction (at the county in the USA) in the name of the trust, which serves as a bridge between the token and the property itself.

For instance, consider APN 074-142-22 located in Santa Cruz County, California. The legal title to this property is held by the Fabrica S7BH3N82F5F26 Trust, as recorded at the county recorder’s office. Ownership of the property token—specifically NFT #14544113128183520803—corresponds to beneficial ownership of this trust. By holding this property token, you become the legal beneficiary of the trust that owns Property APN 074-142-22, granting you full rights to the property through the trust, verifiable both on the blockchain and at the county recorder.

Specifics of the trust agreement:

• Beneficial Ownership: The beneficial ownership of the trust is represented by and follows the property token.

• Transfers: Transfers of the property token act as a full transfer and assignment of beneficial ownership and control of the trust.

• Restrictions: The trust agreement restricts the transfer of the real estate out of the trust without first burning the property token, preventing a "double spend".

• Notification: On transfer of the property token, Fabrica notifies the county and assists owners in submitting any required administrative documentation.

• Termination: The trust can be dissolved at any time by burning the property token and transferring the property out of the trust via deed.

Read more about onchain land ownership

Read more about the Fabrica Trust Agreement

Real estate has long been a cornerstone of secure lending due to its tangible value and historical appreciation. Lending against real estate provides an investment opportunity, backed by scarce assets. With Fabrica’s onchain properties, you can leverage the benefits of real estate lending combined with the speed, efficiency and transparency of blockchain technology.

When property owners wish to take a loan against their asset, the property token is used as collateral by the lending protocol and held in a smart contract until the loan is paid off. Upon repayment of the loan, the token is returned to the borrower.

The mechanics of the loan depend on the specific lending protocol used, but the key functionality provided by Fabrica is the secure connection between the token and the underlying property.

Fabrica has designed its system to provide lenders with certainty and security:

• UCC Article 8: The trust agreement includes an opt-in under Article 8 of the Uniform Commercial Code (UCC). This allows lenders to perfect their security interest in the Fabrica property token without any filing or recording. In the event of default, lenders can have certainty in their ability to take possession of the collateral.

• Reliable Collateral: Upon default, the property token serves as reliable collateral for the lender. Depending on the lending protocol, the token is either auctioned to repay the lender or can be instantly claimed by the lender, making them the new owner of the trust and the property. In all cases, the lender is positioned to recover their investment.

• Legal Compliance: Fabrica has worked extensively with regulators and multiple law firms to ensure the platform’s compliance with legal requirements.

Different lending protocols handle defaults in different ways:

• Direct Transfer: Some protocols will transfer the collateral (the property token) directly to the lender if the borrower defaults, unless borrower and lender find a different agreement.

• Auction: Other protocols will auction the asset, use the proceeds to pay off the lender(s) for the amount due (including interests), and return any extra profit to the original borrower.

If you receive a property token due to a defaulted loan, you have several options:

• Sell the Token: You can list the property on the Fabrica native marketplace or other marketplaces. Land traders are often interested in acquiring properties below market value and typically attend traditional land auctions to acquire such properties.

• Hold the Token: If owning land aligns with your portfolio strategy, you can hold the token and decide to sell it at a later time.

• Develop or Utilize the Property: As the owner, you have the right to develop or utilize the property, subject to local building codes and regulations.

• Remove the Property from Fabrica: As the token holder, you can redeem the token at any time to have the property recorded directly in your name, effectively dissolving the trust and burning its onchain representation. The property then reverts to the traditional system, allowing you to sell it using conventional intermediaries like deeds, real estate agents, notaries, lawyers, title agencies, and title insurance providers—though this process may involve additional complexity and expenses compared to the streamlined Fabrica platform.

• Asset Acquisition Below Market Value: The lender may acquire the property at a value below market, providing an opportunity for profit upon resale.

• Positive Equity: In certain loan types, if the property is worth more than the loan amount, the lender might stand to gain the difference upon default, depending on the lending protocol.

Depending on the lending protocol used and the preferences of the lenders, loan offers can be tailored to specific borrowers:

• Only the Current Property Owner: The lender may choose to offer loans exclusively to the current owner of the property. This allows the lender to selectively offer financing to a specific borrower. If the property is sold, the existing loan offer will not be available to the new buyer.

• Any Owner of the Property: The lender can make the loan offer available to the current owner as well as any future owners who acquire the property while the loan offer is still active. This provides flexibility for both the lender and any subsequent owners.

• A Specific Future Owner: The lender can limit the loan offer to a particular borrower who does not yet own the property but intends to purchase it. This is useful in scenarios where the lender and borrower have a pre-existing agreement or understanding.

Loan offers can also be utilized to acquire properties through a “buy now, pay later” arrangement:

• Facilitated Acquisition: When a property is listed for sale, the platform automatically determines if the buyer can finance the purchase using one of the existing loan offers.

• Down Payment: The buyer is charged only for the down payment at the time of purchase.

• Concurrent Loan Initiation: The loan is initiated concurrently with the transaction from the seller to the buyer, streamlining the acquisition process.

This flexibility in borrower eligibility and financing options allows for a more dynamic and accessible lending environment on the Fabrica platform.

By holding a property token, you are the beneficial owner of the property through the trust. This grants you:

• Full Ownership Rights: You can enjoy, develop, or use the property as you see fit, in compliance with local laws and regulations.

• Right to Income: You are entitled to all net income and receipts from the trust’s property.

• Property Taxes: You are responsible for property taxes and any other obligations associated with property ownership. Property taxes are usually paid once or twice a year and are based on a percentage of the assessed value of the property.

Don’t worry if you’re new to U.S. real estate—Fabrica makes this process seamless for you. We provide a mailbox system that automatically scans and forwards tax bills and other correspondence to you. Our platform monitors tax due dates and assists you in staying compliant, so you can focus on your investment without the administrative burden.

• Compliance with Regulations: You must comply with local building codes and regulations when developing or utilizing the property.

Learn more about property maintenance on our help center.

• Mailbox System: Fabrica provides a mailbox system that automatically scans and forwards tax bills and any other regular correspondence to the current token holder and monitors if taxes are paid or due.

• Administrative Support: Fabrica assists with any required administrative filings to the relevant county assessor when the property token is transferred.

At any moment, you can choose to burn the token, effectively terminating the trust and distributing its assets (the property) to you. After that, the token will no longer exist on the blockchain, and the property will be managed through traditional deeds and title intermediaries.

Similar to other non fungible asset classes, the market determines the value of a property based on its characteristics, features, location, and many other factors. No two properties are the same.

• Third-Party Estimators: Fabrica exposes information from third-party estimators (such as Prycd) who use market data, advanced models and algorithms to estimate the property’s value and the confidence of that estimation.

• Assessed Value: We also provide the latest known assessed value from the local jurisdiction. This value is used to determine property taxes but should not be considered the market value. In many cases, the assessed value is significantly below the actual market value due to limitations on how and when local jurisdictions can adjust assessed values.

The trust setup is completely independent of Fabrica:

• Trust Independence: Fabrica facilitates the creation of the trusts but does not own, operate, or manage them.

• Ownership: The trusts are always owned directly by the token holders.

• Smart Contracts: The smart contracts are permissionless and can operate independently, even in the absence of the Fabrica interface.

• Token Standards: The token contract uses a standard Non Fungible Token (NFT - ERC-1155) that allows operation through other clients, such as OpenSea.

• Open Source: The trust agreement and key tools are open-sourced and available on GitHub.

• No Custodianship: Fabrica does not operate as a custodian; at all times, the assets are owned and controlled directly by their owners. You are in control, always.

• Emergency Tools: Fabrica provides a separate, open-sourced emergency tool to burn tokens (an “escape hatch”) to terminate the trusts and distribute the assets. This tool can be operated directly by token holders.

Learn more about the topic on our help center.

While we’ve designed our system to operate independently in the unlikely event that Fabrica ceases operations, rest assured that we are a well-funded, high-growth startup committed to long-term success.

Fabrica uses nominee trusts as legal wrappers to connect a piece of real estate to an NFT:

• Role of Trustee: The trustee holds legal title to the property but acts only on the direction of the beneficiaries (the token holders).

• Beneficial Ownership: The beneficiaries (token holders) are the owners of the property held in the trust and are responsible for all property taxes and other responsibilities.

• Purpose: The trust allows the beneficial owner to utilize blockchain technology to manage ownership and facilitate transfers.

To provide lenders certainty and security, Fabrica’s trust model uses a UCC Article 8 opt-in:

• Security Interest: This allows lenders to perfect their security interest in the Fabrica property token without any filing or recording.

• Certainty in Default: In the event of default, lenders can have certainty in their ability to take possession of the collateral.

A nominee trust is a legal arrangement where the trustee holds legal title to the property but acts only on the direction of the beneficiaries (the token holders). This structure allows for the separation of legal title and beneficial ownership, facilitating the connection between the token and the property.

Key terms of the trust agreement include:

• Mere Titleholder: The trustee has no substantive responsibility other than serving as the titleholder and performing functions incidental to that role. The trustee can deal with the property only as directed by the beneficial owner(s).

• Right to Income: The beneficial owner(s) is entitled to all net income and receipts from the trust’s property.

• Termination: The beneficial owner(s) may terminate the trust at any time by burning the property token and transferring the property out of the trust by deed.

• Ownership for Tax Purposes: The beneficial owner(s) is treated as the owner of the property for all federal, state, and local tax purposes.

As the platform grows, we anticipate sharing case studies and success stories of lenders who have successfully navigated defaults and recovered assets. This transparency will help build trust and demonstrate the effectiveness of the system. As of October 27th, 2024, no loans have defaulted on the current version of the protocol.

• Notification System: Fabrica’s mailbox system automatically scans and forwards tax bills to the current token holder, if they've connected their wallet and provided an email address on our frontend application.

• Monitoring: We monitor if taxes are paid or due, helping lenders as well as token holders stay informed and compliant with local tax obligations. Tax status is included in the confidence score that is exposed both on our frontend and as a NFT trait on NFT marketplaces.

Yes. The smart contracts are permissionless and can be operated directly, even in the absence of the Fabrica interface. The token contract uses a standard (ERC-1155) that allows you to interact with the asset through other clients and platforms.

There are two different approaches to offering loans on Fabrica, each targeted at different types of investors, risk appetites, and levels of understanding of the underlying asset class.

With peer-to-peer lending, lenders offer loans directly to borrowers. The terms of the loans can be finely tuned to the specific property with great flexibility. Lenders compete on loan offers and often develop advanced strategies by studying the underlying asset and qualifying borrowers.

Fabrica's primary peer-to-peer lending partner is NFTfi.com, one of the first leaders in the onchain lending space, which has orchestrated over $700M in loans.

You can offer a peer-to-peer loan on any property listed on Fabrica, whether it’s for sale or off-market. Simply browse the properties on our website, conduct your due diligence, and click on “Offer a Loan” to create and digitally sign your commitment, specifying the terms you’re offering. The property owner will be notified and can initiate the loan instantly, securely locking their property as collateral. This streamlined process offers a safe and modern way to connect with borrowers.

With pool-to-peer lending, lenders deposit liquidity into a shared pool. The pool automatically deploys capital to borrowers who request a loan, using the estimated value of the property to set the terms. Lenders can specify their risk appetite by selecting the maximum terms (Loan-to-Value ratio and duration) of the loans they want to participate in. The pool automatically invests the capital on autopilot, efficiently allocating the resources of several lenders regardless of the amount each one deposited.

Fabrica’s primary pool-to-peer lending partner is MetaStreet, an innovative company that is creating efficient onchain capital markets for several asset classes.

To provide liquidity, head over to the Fabrica MetaStreet Pool and select the tranche that best matches your risk profile.

If you’re interested in articles that describe in detail how each protocol works and the strategies adopted by lenders, follow this blog closely and subscribe to updates.

Fabrica aims to provide a secure, efficient, and legally compliant platform to bring real estate assets into the future. By bridging the gap between blockchain technology and traditional real estate, we offer lenders and borrowers new opportunities while ensuring that all parties’ rights and obligations are clear and protected.

For any further questions or detailed discussions, please do not hesitate to reach out to our team on X (formerly Twitter), Discord or using the support chat on the marketplace.

• Fabrica Marketplace

• Help Center

• Developer Documentation

• NFTfi peer-to-peer lending

• MetaStreet pool-to-peer lending

That’s right: Buyers can now acquire property instantly with a downpayment and pay the rest overtime.

Traditionally, buying land demands a significant investment and a mountain of paperwork, often putting it out of reach for many. With Buy Now, Pay Later, anyone can secure a plot of land with just a simple down payment and enjoy the flexibility to pay the remainder over a period that fits their financial situation. This means buyers can leverage their capital more effectively—opening opportunities for more people to start investing in land and increase their purchase power.

For sellers, liquidity is king. The faster they can convert their land into cash, the more opportunities they can seize. On Fabrica, the minute a transaction occurs, sellers receive the funds directly in their account—whether the sale was a cash transaction, or part of a finance plan. 

This instant liquidity is provided by third-party lenders (powered by NFTfi), which ensures sellers don’t have to worry about buyer’s financial constraints.

This means that sellers can immediately cash out, reinvest, or reallocate their capital without any delay or limitation. The assurance of immediate payment allows land investors to focus on what they do best: find and sell the best properties out there. 

Onchain lenders can earn interest by providing liquidity that is secured by real tangible assets, while still benefiting from the speed, certainty and convenience of fully digital operations. This allows them to diversify and expand their portfolio in an asset class that was previously available only through outdated paper-based processes. 

It’s as simple as clicking “Buy Land”, selecting the financing terms that suit you, and choosing your payment method—whether through crypto or a traditional bank account (powered by Coinflow). In a matter of few seconds, the buyer will become the owner of the property, the seller will receive the full payment, and lenders will have their capital earning interest.

Experience the future of land ownership today here: fabrica.land.

Fabrica is the leading platform for tokenizing real estate properties at scale. Since 2018, it has refined its model and worked closely with local and state regulators to expand to all 50 states in the US. Fabrica allows users to on-ramp, buy, sell, and get loans on real properties. Fabrica is backed by leading investors, including Mark Cuban, OpenSea, Sound Ventures (Ashton Kutcher's fund), Pioneer Fund and Urban Innovation Fund.

Fabrica is on a mission to make it as simple as clicking the "Buy Land" button. Say goodbye to slow, complex processes—and hello to snagging your dream property in an instant.

We are excited to announce a game-changing update to our payment system: direct bank transfers. You can now connect your bank account directly to Fabrica, and we’ll handle transactions smoothly and securely within just a few taps. Whether it’s a sunny meadow in Hudson, the Arizona desert, or rustic woodland in California, purchasing your perfect piece of earth has never been easier.

So, what makes this update so great? For starters, when you link your bank account, you can go big—paying up to $50,000 in a single transaction. This means you can secure a sprawling estate or a prime piece of real estate without the usual financial gymnastics. And we’re not stopping there—soon, we’ll support even larger transactions (and if you want to go even bigger, you can always go bankless and pay with crypto).

1. Click "Buy Land"

2. Connect your bank account

3. Confirm the purchase

It’s that simple!

As soon as the payment goes through (we’re still dealing with banks—have a bit of patience with them…), the land is yours! Fabrica will keep you posted by email, so you just need to get ready to celebrate. That’s it!

Gone are the days of high credit card fees, escrows, fax machines, paperwork, and tedious payment approvals. Our direct bank transfer option puts expansive land-buying power right at your fingertips.

So, what are you waiting for? Find your spot in the world and make it yours.

Bank transfers and credit cards payment are enabled by our friends at Coinflow.

Fabrica is a new way to own real estate. At first glance, our website might look a lot like other real estate websites (think Zillow or Streeteasy), where you can browse listings online. These websites are excellent at allowing you to browse properties, but when the time comes to actually make a purchase, you’ll have to go through the traditional processes: paperwork, notaries and all sorts of intermediaries.

On Fabrica, when you see a property, you can make it yours within minutes. When you click the "buy" button, you’re charged to your bank account, crypto account—or even credit card—and you can become the owner of the property in just a few clicks. The seller also gets their proceeds instantly. It’s a win-win.

The same speed and convenience is true for all operations (like borrowing against your property). It all happens digitally, seamlessly, and without the slow and expensive paperwork. 

Bringing something onchain means creating a digital representation of the asset on a blockchain. Once it’s onchain, the asset benefits from instant, secure, and efficient operation. It’s supercharged, while retaining all the features and value of the underlying asset. 

On top of that, its digital representation allows for additional uses and flexibility, like fractional ownership—enabling investors to buy and sell portions of properties without the need for traditional, cumbersome processes. This is also commonly known as “Tokenized Real Estate,” since the ownership of the asset is controlled through a defined number of tokens, each representing one “piece” of ownership (similar to a share in a company). In some cases, token ownership can even unlock access to a share of the revenue generated by the property.

Fabrica makes it extremely easy to bring property onchain. In three easy steps, you can move from a traditional deed to fully digital ownership, and immediately benefit while you continue enjoying your property.

From a legal standpoint, your property title will be held in a trust, specifically designed to enable digital transfers. This arrangement means that while Fabrica facilitates the process, it does not control the trust. Instead, the owner of the property always has full control of the trust, which acts purely as a “Nameholder” at the local jurisdiction. This method provides an added layer of security and ensures that your interests are protected for all parties throughout the transaction and onchain operations. Learn more about our open source trust agreement.

The short answer is: no. We’re making Fabrica as easy to use as any other e-commerce site. Understanding blockchain technology is really not necessary for listing your property on Fabrica. Our platform is designed to be user-friendly, allowing landowners to list their properties instantly. The technical aspects of blockchain and tokenization are handled under the hood, so you can focus on the benefits of owning your land, or selling it online.

Fabrica’s setup is completely transparent from a tax perspective, so you’ll still be responsible for paying any taxes that are due. Still, we can help: we’re building tools to remind you when taxes are due, and eventually we’ll even facilitate payments themselves, so you won’t have to worry about delinquent taxes and mailing checks.

Typically, these are the taxes you’ll incur when buying and owning properties:

• Transfer taxes: These taxes and fees may apply when you buy or sell a property, digitally or traditionally. The specific rules vary by state and county, but Fabrica will guide you in paying these fees if and when they are due.

• Income and capital gain taxes: If you sell real property and make a profit, you may have federal and state tax obligations. It's your responsibility to understand and fulfill your tax obligations on gains from selling a property on Fabrica, similar to when you sell any other digital (cryptocurrencies) or traditional (stocks, real estate) asset.

• Property taxes: Property taxes are typically due biannually to the county. Property owners are responsible for paying these taxes. You will receive notifications and tax bills from the tax assessor directly to the email associated with your account. While Fabrica plans to offer automated tax payment tools in the future, for now, it remains the property owner's responsibility. Please note taxes are due even if for some reasons you don’t receive notifications from the tax assessor.
  
  Read more information on property taxes.

To enable fast transactions and safe operations, each property on Fabrica needs to be “on-ramped” onchain, creating a Trust that is recorded at the county. The operation takes a few minutes and is reversible.

Yes, you’ll be signing a deed to put the property in a trust and bring it onchain. This happens just once per property: after that initial operation, the property can be listed and traded freely amongst different people in a fully digital environment, without any need to sign an additional deed.

You can close a sale almost instantly on Fabrica.

One of the most significant advantages of using Fabrica is the speed of transactions. Once all conditions are met, closing a property sale takes under one minute. This rapid process is possible thanks to the trust framework that facilitates instant transfer of ownership recorded and secured onchain.

Once the sale is completed, the proceeds are immediately available in your account (also known as your wallet). You can move your funds instantly to any crypto wallet or crypto exchange (like Coinbase) or withdraw directly to your bank account (coming soon)!

Yes, you can leverage your property as collateral to access capital quickly across many lending protocols. We have a special integration with NFTfi for loan services, enabling landowners to unlock the value of their land without needing to sell it. This service can be especially useful for landowners needing immediate funds for various purposes. We are also exploring new relationships with prospective lending partners and protocols.

Note that ​​during the loan, the borrower retains ownership while the property token is secured in a Smart Contract. Repayment before the loan end date is crucial to regain the token.

Adding your property to the Fabrica ecosystem exposes it to a broader market of potential buyers and investors. Landowners choose the price that they’d like to sell for, and buyers can directly and instantly purchase the property at that price. For convenience, most properties have an estimated value that is determined by a third party. The estimated value is always shown to the owner, and it’s public for all properties that are not listed for sale.

Plus, buyers can make an offer on properties, even when they’re off market!

Fabrica offers a revolutionary approach to land ownership, making it easier and more efficient to own, sell, and leverage your property. By addressing these common questions, we hope to provide clarity and confidence to landowners who are considering leveraging our platform. Visit our help center at help.fabrica.land for our comprehensive FAQs, which are designed to provide you with all the information you need to navigate the Fabrica platform.

For more support, we are always open to having a conversation on discord.

At Fabrica, we’ve developed a novel approach to owning real estate, unlocking instant transactions, liquidity and access to capital. At its core, the Fabrica Trust is a custom-designed legal instrument that bridges the traditional land title with the blockchain, upgrading how property ownership can operate. Driven by a commitment to transparency, innovation, and community collaboration, today we’re releasing our Trust Agreement as Open Source. Over the past five years, the Trust has successfully facilitated the transfer of millions of dollars worth of real estate onchain, making property ownership secure, accessible, and flexible. Now, we’re making the latest version available for everyone to build on.

This isn't your typical trust arrangement—it's designed specifically to bridge the old with the new, melding traditional real estate systems with blockchain's modernity. Our Trust exists solely to hold title, ensuring that full ownership and control are seamlessly linked to the possession of a corresponding token. 

The trust is designed to consistently hold title, mediating between the token holder and official land registries. It replaces the complexities of traditional operations with streamlined, transparent processes. Control of the trust correlates directly with the ownership of a specific digital token. As this token changes hands, so does ownership of the property. This setup allows for a decentralized, tamper-proof system where the trust operates independent of any third party. Most importantly, Fabrica does not own nor manage the trust; rather, we facilitate its use, providing a standardized, user-friendly system for operating real estate onchain while leaving unmediated power and rights to property owners.

Embracing the spirit of open source systems, we've crafted the Fabrica Trust to be a versatile platform for innovation. Users are encouraged to adapt and expand upon our foundational work, exploring new possibilities in real estate and beyond:

• Different asset classes: Our trust can be forked and customized to a wide range of assets beyond real estate sales. We envision other companies bringing a wide range of real world assets onchain using our approach. Think big: domain names, car title, patents, high fashion, jewelry, furniture, artwork—or even yachts.

• Global Reach: Our trust is adaptable for international use, capable of handling various property types across different jurisdictions. We envision experiments  to onramp properties outside of the US.

• Expand the functionality: Whether it's fractional ownership or other new capabilities, the trust can be upgraded to meet evolving needs and serve new business models, opening up a new era of innovation for the largest asset class in the world.

Fabrica’s trust system is based on California law due to its versatility and legal robustness, though we've explored and are open to adaptations using other state laws and international frameworks. Review our trust docs to see how it can best be adapted to suit your needs and feel free to reach out to discuss improvements, new ideas or share your feedback.

The Fabrica Trust is more than just a tool—it's the firmware of onchain real estate. It is constantly being updated and refined to ensure it remains at the cutting edge of blockchain transactions with real world assets. We encourage you to fork our model, available on our GitHub repository, to create tailored solutions for your specific needs and Smart Contracts. Engage with our community by suggesting improvements or new applications—think of our trust agreement as a dynamic tool that's shaping the future of interoperable real property onchain.

As we continue to innovate, integrating features that facilitate lending through platforms like NFTfi, we look forward to seeing how people will use the Fabrica Trust to redefine what’s possible in real estate. Dive into the potential of RWA (real-world assets) onchain and help set new standards for the entire industry.

Explore more and contribute here: Fabrica GitHub Repository

Join us at the forefront of the onchain real estate revolution. We can’t wait to see what you build!

Disclaimer: Real estate transactions and jurisdictional regulations are highly fact specific and require a knowledge of both state and federal laws. Fabrica does not assume any responsibility for any consequence of using the documents referenced here. These documents have been prepared for informational purposes and are not intended to constitute legal advice, create an attorney-client relationship, or be advertising or solicitation of any type. Any party should

Introduction

Welcome to the cutting-edge era of onchain real estate. At Fabrica, we’re pioneering the transition of land ownership to the blockchain—making it simpler, more secure, and more accessible for individuals and communities. Over the last few years, Decentralized Autonomous Organizations (DAOs) have gained traction for their potential to revolutionize hierarchical business structures, using technology to engage in new modes of collective action. DAOs use smart contracts on the blockchain to govern group decisions like investments, funding, and positioning. All DAO members are welcome to vote, and the smart contract executes the decisions automatically.

At Fabrica, we are empowering DAOs to make collective land purchases. To date, we’ve seen a handful of DAOs come together to manage and execute real estate transactions onchain both seamlessly and effectively. These entities are not just redefining who can own land, but how the land is owned. From CougarDAO to HODLand to CoyoteCommons and CityDAO, each offers a unique case study in the opportunities that lie in blockchain-based land ownership. 

Let’s dive into how DAOs are changing the game with Fabrica’s platform.

Meet CougarDAO: CougarDAO is a blockchain real estate organization. Initially set on buying an island, this group of friends adapted their dreams to the more practical acquisition of a farm. Operating as a member-managed LLC, CougarDAO aims to generate and distribute income from their property holdings, demonstrating the versatility of DAOs in real-world applications. Plus, CougarDAO listed their acreage on hipcamp, where you can list and book space for tent camping, RV parks, cabins and more.  Check out CougarDAO’s profile on Fabrica.

HODLand DAO: Born from the minds at Fabrica, HODLand is both a proof of concept and a functional entity that has owned properties in California and Arizona. While the California property was sold, the Arizona land continues to offer intriguing possibilities. HODLand extends its impact by providing capital loans secured against land on NFTfi, showcasing how DAOs can function as dynamic financial entities. Take a look at HODLand’s holdings on Fabrica. 

Coyote Commons: Though still in its nascent stages, Coyote Commons is a testament to the belief in DAOs as a catalyst for revitalizing land ownership. Their vision extends beyond mere ownership to creating tangible assets like cabins or hosting short-term rentals, potentially evolving into a network state. Learn more about their journey.

CityDAO: This experiment in decentralized land ownership has started with a 40-acre plot in Wyoming, setting a precedent for how large-scale land management can be handled by a decentralized community, redefining governance and utilization in the process.

Purchasing land as a DAO simplifies what has traditionally been a complex legal and financial process. There are now so many tools available to help set up and fund a DAO, create legal structures, organize members, and engage in governance.  You can use tools like Safe to set up a multisig wallet with and manage your assets, or Snapshot to participate in decentralized voting off chain.

Once your DAO is up and running, buying land with it on Fabrica is simple: it's just like acquiring any other digital asset onchain. There is no need to deal with old school deeds, complex forms, notaries, wet signatures, bank accounts or offchain payments. You can close onchain in just 30 seconds—a few clicks—and the land is legally owned by the DAO through Fabrica’s trust agreement.

When a DAO owns property, every member shares in the collective ownership of the token that represents that property (according to the setup of the DAO). Imagine a future where:

• Extended Property Networks: A DAO could own multiple properties or fractions thereof, turning real estate investment into something more fluid and accessible.

• Tokens: Issuing tokens will not only signify membership in a DAO, but potentially also participation in future revenues and gains from sales, loans and other productive uses of the property.

• Innovative Ownership Models: From fractional ownership to timeshares, the possibilities for how property is owned and utilized are expansive.

But it doesn’t end there. What would your DAO do with ten acres? You could install a massive piece of artwork made of glass walls by Kimsooja. You could build a community network of cabins, like CabinDAO, use them to host an annual DAO retreat, or create timeshares for active members. You could hold a crypto conference by day/music festival by night, like FWB Fest or open an art gallery in the high desert, like the one started by Art Blocks. The possibilities are endless.

As DAOs continue to evolve, the potential for growth in the real estate sector is immense. We encourage forward-thinking individuals and collectives to explore how the DAO model could fit into their future ventures.

The integration of DAOs and blockchain technology in real estate isn't just a trend; it's the beginning of a transformative journey. At Fabrica, we are committed to being at the forefront of this revolution, helping pioneers and others reshape the landscape of property ownership. Join us as we enter the next frontier of onchain real estate.

Discover More: Interested in learning more about DAOs and blockchain in real estate? Join the conversation on discord or head to the marketplace to start browsing for land.

Before becoming a land owner, Aaron carved out a niche as an underground event producer in California, hosting nomadic spa parties and healing arts events in what he describes as a “magical garden.” These gatherings featured harp music, sound therapy, massages, and open mics, using land as an outdoor venue whose potential was activated by artists and brought people from all walks of life together. This experience acted as his gateway to land ownership and profoundly shaped his future visions for the properties in his holdings. 

Now, as a licensed massage therapist, Aaron has traveled across many states, developing a keen sense of what he seeks in land. He has a penchant for open spaces that evoke a sense of mystique. A lifelong nomad, he recently put down roots in Borrego Springs, and purchased two properties—one in California, and one in New York—that have been onramped as land NFTs on Fabrica. 

Admitting his initial lack of knowledge about blockchains and crypto, that didn’t stop him from trying. Through Fabrica, he discovered a community of like-minded landowners who offered him their knowledge of onchain land. When he discusses his activity with skeptics, he quickly demystifies the process, saying, “It’s not that crazy. It’s just a land trust. And you’re able to exchange and sell it online. That’s all it is.”

Land collectors understand that the search for the perfect parcel is part of the journey. For Aaron, the thrill comes from visiting a site multiple times before placing an offer or through winning an auction. He made several trips to his California plot, taking advantage of his frequent visits to Yosemite, sometimes visiting the land multiple times within a single week. Aaron won his New York property through an online auction, where he faced no competition. Feeling exceptionally fortunate, he envisioned building a trail on the land even before he discovered its existence. Proud of this acquisition, he recognizes its potential, especially given its proximity to New York City, which is just an hour away. For him, finding land that resonates personally and aligns with his interests ignites him to push further.

His eyes light up when he talks about building, developing, and activating his land. The New York property may be landlocked, but sits near the new Schunnemunk Rail Trail development that serves as a bikeway and pedestrian path, offering opportunities for fishing, kayaking, and even a stage near the river for recording arts or reading books. His Dunsmuir property, situated near Mount Shasta in rural California—one of his favorite places in the world—boasts abundant fly fishing, the sound of trains echoing through the mountains, and a mystical atmosphere. He envisions constructing a day-use structure on it, facing the forest, where people can use synthesizers and headphones to record music in the ambience of nature.

The real world utility and beauty of the land is important, but its tokenization as an NFT offers new avenues for experimentation. Once his properties were onramped to Fabrica, Aaron was the first person to take out a loan against one of his parcels. The process was quick; within five minutes of accepting the loan, $8,000 landed in his wallet. With the loan, he plans to search for a new property in Texas to expand his growing portfolio. If finding a plot in Texas doesn't work out, he intends to develop his Northern California property, ensuring a win-win scenario.

At his core, Aaron is a connector. This is evident from the locations of his properties near railroad tracks and rivers, with dreams of hosting events to facilitate access and connection. He aims to extend this concept into the future, envisioning owning a network of properties to form a blockchain-based Hip Camp. His idea includes developing an artist token that grants camping rights across his land holdings. He wants to offer musicians and bands the ability to record in quiet, secluded spots with solar hookups, away from the disturbances of sound pollution, making these places uniquely suited for off-grid recordings and field work. 

Aaron believes in creating collaborative spaces where unused land is governed collectively, appealing to artists, videographers, photographers, and media producers who find the costs of city recording prohibitive. He envisions scenic locations not just for leisure but as creative studios for filming and production, proposing a bicoastal matrix that serves as both a physical and digital resource for creators to realize their dreams. As technology and physical land begin to intertwine more closely, Aaron's role in assembling the pieces and connecting new trails will be viewed as prescient.

Even after the land is owned, developed, and experimented with, the end goal for onchain land owners like Aaron revolves around independence, self-governance, and autonomy. His aim is not to disappear off the grid, but to carve out a future that’s fully in his control. By bringing land onchain, it becomes networked and removed from obscurity, embedded as an integral part of personal history that continually evolves and reveals more over time. With every venture into uncharted territory, he paves a path for others to follow, marking a trail of innovation and discovery.

Transcript

Fabrica: Aaron, why did you start buying land?

Aaron Garrett Greenberg: I wanted to start building wealth that I was passionate about. And I've always loved the outdoors. Open spaces like Atlas Obscura, things that people do with open space has always interested me. I wanted to own land as basically a way for me to build wealth because that was the most interesting thing to do.

Fabrica: Aaron, why do you own land in different states?

Aaron Garrett Greenberg: New York and California are like two halves of a locket for me. I do have professional licenses in both states for doing massage therapy, but also have volunteered and worked with different event planning and festival, not just in those states, but all over the place. I've had about 15 years of nomadic lifestyle until moving to San Diego and really putting down roots. But that was the cause behind it too was wanting to pick a place after moving around a lot and start actually investing in some locations that I actually like. The places that I bought land, it was because I like those places.

Fabrica: How did you find each property?

Aaron Garrett Greenberg: One of them I did, one of them I did not. The California land, I sought it out, visited it because it was in my area that I was actually living at the time. Like at the time I was in Yosemite and I was able to drive out there. It was a few hours, but I took a drive two or three times in a week to go see it before. And I didn't know a lot about due diligence at the time, but it was actually a payment arrangement. So I had extra time to do my due diligence because I could have changed around my investment or backed out if it was really awful. So that was the first one I came across. And then shortly after that, about two months after that, I was participating in auctions in New York State. And that's where I won the New York parcel by bidding on it on an online auction. I participated in a lot of auctions since then and I haven't been as lucky as I was that time. But I think it's because I looked at it on the map and I saw that trail in my mind before I even started looking up the news articles about what was going on. For whatever reason, that one slipped through the cracks and I was able to snatch it up. And I'm really proud of it. I think it has a lot of potential, especially because it's one hour from New York City, the Shunamunk rail trail. And I have spoken with Open Space Institute, one of their planners a couple years ago. Cause I was seeing if they wanted to rent or buy this parcel. And at the time they said it was too small for their portfolio, but that's how I confirmed that it was the one that I thought it was. Not to mention that when you look at their website, they have the Highlands West Connectivity Trail and you can open up the map and it shows the line going through. Salisbury Mills, Erie Property Corp. Had it for a long time before they sold it to Open Space. And then I think ultimately Open Space is going to sell it to the county, is the way that works. I admire that organization a lot and it's really fun to follow all the different projects they do and imagine myself doing something similar on the small scale. Like they have. They have their portfolio and like, when I get on people's websites and I see a curated collection of something that you can tell there's a lot of love behind it. That's cool to me.

Fabrica: How was the experience of getting a loan?

Aaron Garrett Greenberg: It's pretty cool because I don't think there's a lot of places that are giving out loans for land as collateral. It was super easy being the first person. This was like in beta at the time, but I was able to just click on the link and agree to the terms. And it was like five or six minutes later that the USDC was put into my wallet. It definitely gave me an adrenaline rush. But this is exciting and this is fun. That's a valuable thing because it allows you to borrow against the land you have and then reinvested in more properties if you want to, which is what I'm planning to do. I'm planning to go to Texas in April for the eclipse with our rv. And like I do, I want to go see and pick out a parcel that I like. I'm interested in the Big Bend area, so we're going to hit that up on our way to Del Rio. I think that's part of the fun of it for me too, is searching and researching. If I find something, like maybe put 50% down, then I get down to Texas. Or if I don't find something, then I'm going to probably use that money to build the Dunsmere build because I have a permit already to start building trail. It's really easy with Siskiyou county to set it all up. So I was planning on going up there at some point in 2024 as well as Texas, going up to Northern California for At least a month or something and start building the trail and flattening some earth because I just need a 10 by 10 clearing. And then I'm going to build that 8 by 8 structure. I want to build it out of like stone. I want to do stonework or something really exceptional. It's going to really boost the value of it. And whether I sell it or not, other people will want to go there and experience it and that's exciting.

Fabrica: What are your future visions for Land?

Aaron Garrett Greenberg: Hip Camp that's also maybe even like a publishing label. I'm going even more tangential with it, but I see maybe developing something like an artist toke that gives people rights to camp anywhere that's in my portfolio. And not just camp there, but like maybe rehearse. If they have a band or record. If they've got like a solar hookup or something, they can go out there and record off grid. You really want quiet places, especially if you're into field recording, which is another one of my interests. Like these places are novel for those sorts of things because they don't have sound pollution, the ones that I have. But bringing it on chain a lot. I think if I'm. If we're all onto something, we're going to be able to govern this land in really creative ways. And that's what's most appealing to me. Otherwise it's not going to get used. First of all, there's a lot of land that you want that you can see potential if you're an artist. And I think that applicable uses would be any sort of media production especially I didn't even mention photography, videography, any sort of media production. Like it's expensive to record in cities and places and people often go out of the country. So I would love to learn about film contracts in addition, maybe run this, that direction where people are contracting for these scenic locations to film and produce. When I came from New York To California in 2020, I was planning some sort of underground event because I wanted to have a gathering so badly. And I was like, I'm just going to move to California and I'm going to do a spa pop up. Because I'm coming from the hospitality world, but I want to have performance too. So I was like, you could have someone playing a harp while people are having sound therapy and massages and doing an open mic spoken word sort of thing. A year and a half after that, in San Diego County, I hosted a nomadic spa party called the Dry Spell and it was a healing arts and storytelling event. In a really, like, magical garden with a lot of art installations and pyrotechnics. I was almost there because I wanted to host it on my own land. But this guy that I rented from, he was doing exactly what I wanted to. He owned a piece of land and was running it as an outdoor venue. So that was a celebration and a gateway into land ownership because I was already looking at. I could spend a lot of money and rent a venue, or I could save money and try and create a venue even if it is off grid. There's a lot of events that are budding that they use portable utilities and things like that, and they just pull it off. And you bring in the water and you bring in the power and you work with. If you're in a really rural area, there's probably not a lot of obstacles to having a gathering like that. I know people a lot of places because of traveling and working in the industry that I do. I do envision a bi coastal matrix of creators and using the land as a physical and digital resource to make all their dreams come true.

Land ownership's next era is now loading. At Fabrica, we're here to demolish the delays of the old world and make the path to property ownership as seamless as streaming your favorite show. Goodbye, Blockbuster-era frustrations; hello, Netflix-level efficiency in land transactions. The future of land ownership isn't just knocking—it's already here, shapeshifting the land beneath our feet.

Taking land ownership onto the blockchain (or "onchain" to keep it short) makes the process faster, simpler, and more enjoyable. Our journey at Fabrica is living proof. Back in 2018, we broke new ground by tokenizing the first property as an NFT. Since then, hundreds of properties—across  the United States—are now onchain. Next, buying land from anywhere in the world will be a reality. No small feat, but a worthwhile endeavor for all who see the vision of owning land like it’s 2024.

What is onchain land?

Onchain land is the very same land under your feet—the tangible, real-world plots you can touch, live on, and build your dreams upon. Let's be clear: we're not venturing into the metaverse. It's land with genuine utility, offering the solid ground you need to lay foundations, both literally and figuratively. Real land, real value, reimagined for today's world.

Looking ahead, envision a future where every asset of value finds its place onchain. With a staggering value close to $400 trillion, real estate stands as the titan of asset classes, dwarfing the $2 trillion valuation of the entire crypto-verse. (For now.) The impending convergence of these two colossal forces—real estate and blockchain—is the unprecedented generational opportunity for land ownership.  

What do you actually get when you buy a land NFT?

In 2021, NFTs burst onto the global stage as a new medium for digital art. Yet, the technology extends far beyond that. Each NFT stands as a distinct digital token, its uniqueness verifiable onchain, mirroring the inherent value of real property. Simply put, each piece of land is tokenized into its own NFT.

At Fabrica, we zero in on tokenizing real estate's bedrock: the Title. Onboarding a property with Fabrica initiates the creation of a new Trust, transferring legal title so the Trust becomes the property's recognized owner in local jurisdictions. At the same time, an NFT representing this Trust is minted. Owning this NFT grants you full control over the Trust and the property itself.

What happens when you sell a land NFT on Fabrica?

With a land NFT, the property title stays under the Trust's name within the traditional local registry. The act of trading the NFT equates to transferring the Trust's ownership, which holds the property. This method is streamlined because it ties property ownership to the NFT. Engaging in buying or selling the NFT shifts full property rights, as detailed in the Operating Agreement, effectively sidestepping traditional processes.

Is it just a better way to buy and sell land?

Freeing land from the clutches of paper and digitizing deeds is a huge step forward for buying and selling land. Technology has upended every facet of our existence, and land acquisition shouldn't be left out. Tokenized assets bring a suite of benefits that lay the groundwork for applications once thought impossible.

Here’s how land NFTs stack up to the old way of doing things: 

• Faster and safer: Leveraging digital assets via smart contracts makes transactions instantaneous and vastly reduces human error. A buyer, with the click of a few buttons and sufficient funds, can finalize the purchase in minutes and the seller receives funds instantly—a stark contrast to the traditional, weeks-long ordeal.

• Cheaper and frictionless: Transaction costs plummet when human involvement is minimized. Onchain transactions streamline the entire process—distribution, trading, clearing, settlement, and safekeeping—merging them into one efficient layer.

• More liquid: Historically, real estate has been an illiquid asset. Tokenization has upended this, enhancing market efficiency and facilitating a higher volume of transactions to unlock liquidity.

• Lower entry barrier: Reduced transaction costs create opportunities for trading less valuable assets or even fractions of assets. This boost in accessibility democratizes investment, allowing a broader spectrum of individuals to buy in.

• Borderless transactions: With NFTs as the vehicle for ownership, the process of buying a property is the same everywhere, regardless of where the property is located. Buying land in New York is now no different than in Bali.

Is this simply a better way to acquire and make use of land? Absolutely. Beyond the technology, there's a wealth of potential yet to be discovered with onchain land.

Where is this all headed?

To start, onchain land ownership enables smooth land transactions, ensuring asset holders retain full, direct, control over their properties. Next, streamlined ownership will help unlock even more potential from each property.

It’s still early, but we’re excited about a lot of different emerging use cases for onchain land:  

• DeFi (Decentralized Finance): Previously, securing a loan against your property or facilitating a quick sale could drag on for months, with hard money loans often being an inconvenient option. Now, it's a matter of a few clicks. Check out Fabrica's integration with NFTfi to see it in action.

• Composability and Interoperability: With your property tokenized as an NFT, it securely resides in your crypto wallet, ready for use in a plethora of web3 applications.  

• Fractionalized Ownership: Giving more people the opportunity to invest in property through fractional ownership will offer access to a wider audience at a lower cost. 

• DAO-driven Ownership: DAOs—networks of individuals united online—are altering land ownership by pooling resources to buy and manage property together. Examples include Cougar DAO and Coyote Commons. 

• Investment Diversification: The composability of tokens simplifies diversifying investment portfolios with real estate, making onchain land ownership accessible worldwide.

• Land Development: NFTs live onchain, yet they preserve the full allure and utility of the real-world assets they mirror. You can live on, cultivate, and build up the land however you desire.

The next decade is expected to see a significant increase in the adoption and development of onchain land—a shift that promises to reshape the future with its vast, untapped possibilities. We believe that the tokenization of real estate is poised to revolutionize the industry by making notary visits and hefty transaction costs practically unnecessary. Our goal is to modernize real estate ownership, simplifying and accelerating all processes to make them enjoyable—an overdue upgrade for the onchain era.

Real estate is the US’ largest asset class at $43.5 trilllion. Bringing it to the blockchain through Fabrica supercharges an asset class that typically faces significant information asymmetry and barriers to entry in lending markets. Digital-asset-based lending via NFTfi further widens this access by unlocking capital for millions of land owners without having to go through a bank. This means that land owners with all types of credit scores and financial history can now tap into on-chain capital within minutes. This is expected to cut down hours, days, or even months of antiquated paper pushing.

Fabrica's long-standing platform lets users buy and sell real land via digital assets, removing the complexity and inefficiency of the legacy deed system. They hold over 20 licenses, operate in all 50 states and have on-boarded over 300 properties to their platform. NFTfi adds a blockchain-based and widely trusted digital asset lending infrastructure that has facilitated over $500M in peer-to-peer loans to date. The partnership lets users borrow against their properties or offer loans to landowners on either Fabrica or NFTfi in one seamless process.

Both Fabrica and NFTfi are in the business of empowering users with more flexibility and utility by providing superpowers to assets on-chain. The ability to unlock capital stuck in real world assets (RWA) is the most important upgrade to a whole asset class, and furthermore the best opportunity for the crypto industry to prove a tangible and much needed use case and onboard users at scale.

says Federico Pomi, CEO of Fabrica. 

Fabrica has consistently pioneered the tokenization of real estate, showing respect and appreciation for existing regulatory frameworks. We're thrilled to integrate our robust lending platform with Fabrica, creating an innovative and unique offering in the market.

says Stephen Young, co-founder and CEO of NFTfi. 

About Fabrica

Fabrica is the leading platform to tokenize real estate properties at scale. Since 2018, it has refined its model and worked closely with local and state regulators to expand to all 50 states in the US. Fabrica allows users to on-ramp, buy, sell, and get loans on real properties. Fabrica is backed by leading investors, including Mark Cuban, OpenSea, Sound Ventures (Ashton Kutcher's fund), Pioneer Fund and Urban Innovation Fund.

About NFTfi

NFTfi is the leading peer-to-peer NFT lending platform. NFTfi allows users to borrow against their NFTs or lend to borrowers in exchange for interest payments. NFTfi is backed by leading investors, including 1KX, Coinfund and Maven 11 Capital.